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Taxation and Low-Income Housing

Question: Low-income housing credits are available to:
a. Anyone who provides qualifying low-income housing
b. Anyone who provides qualifying low-income housing and receives a credit allocation from state government
c. Anyone who rehabilitates a building used only as low-income housing
d. Anyone who occupies low-income housing

I am unsure of this one. I think it is a. The law discusses rehabilitation credits, but it also seems to be available for those who provide low-income housing.

Question: If a tenant pays higher rent at the beginning of a lease and lower rent at the end of a lease:
a. The cash-basis tenant is entitled to deduct the rent when it is paid
b. The cash-basis taxpayer is not entitled to deduct rent because the scheme is a tax-avoidance scheme
c. Part of the rent may be considered advance rent that can only be deducted when it is actually due based on average rent
d. The cash-basis landlord must include the rent in his/her income only to the extent that the lowest monthly rental amount

Question: If a lease calls for rent to be paid at the end of the lease:
a. A cash-basis landlord includes the rent in income when it is received
b. A cash-basis landlord includes the rent in income at the beginning of the lease
c. A cash-basis landlord includes the rent in income as it accrues
d. A cash-basis landlord can elect under Section 467 to include the rent in income either at the beginning or the end of the lease

Question: If a tenant pays a security deposit to the landlord:
a. The security deposit is immediate income to the landlord
b. The security deposit is income to the landlord when the landlord can legally apply the deposit to unpaid rent
c. The security deposit is never income to the landlord
d. The security deposit is income to the landlord only when the tenant agrees that the landlord is entitled to the deposit

Question: If a tenant makes permanent improvements to leased premises:
a. Those improvements are the property of the tenant and can be depreciated by the tenant and become the property of the tenant when the lease ends
b. Those improvements are the property of the landlord
c. If those improvements increase the value of the property, they are income to the landlord at the end of the lease
d. Whether or not they increase the value of the property, they are income to the landlord at the end of the lease

Solution Preview

1) Low-income housing credits are available to:

b: Anyone who provides qualifying low-income housing and receives a credit allocation from state government

(See this as an example: Low-income housing credits are available to individual taxpayers, partnerships, and corporations that have a qualified low-income housing project located in Massachusetts. The Department of ...

Solution Summary

Taxation and low-income housing multiple choice questions are answered in this solution.

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