In March, Tax Partner and leader of MCM’s Real Estate Tax Practice Andy Ackermann, CPA, and Dave Herdlick, CPA from Rubin Brown, traveled to MCM’s Downtown Cincinnati office to present on New Market Tax Credits (NMTC) to a standing room only crowd of commercial real estate investors, developers and service providers. The purpose of the presentation was to educate attendees on New Market Tax Credits and how they can be used to bridge the funding gap for commercial real estate projects.
The New Market Tax Credit program is a federal tax credit incentive, created to attract private sector investments in an effort to encourage economic growth in targeted areas. The program offers a 39% tax credit to investors over a 7 year period. In a nutshell, investors capitalize dollars into an entity called a Community Development Entity (“CDE”) in exchange for the New Market Tax Credit. The CDE then will make an investment or loan to a qualified business that meets certain eligibility requirements. This type of financing has been used in many different types of industries, such as commercial, industrial, mixed use projects, and even working capital of operating businesses.
There are many complexities to the New Market Tax Credit program; however, it is a much needed resource to help close the funding gap on a variety of commercial real estate development projects. To learn more about how New Market Tax Credits might benefit your project, please send an e-mail to Andy Ackermann or contact him at 812.670.3453.