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Maximizing Historic Preservation Tax Credits with Master Tenant Syndication

Learn how the "Master Tenant" syndication structure can help investors and developers maximize historic preservation tax credits while minimizing management fees. This single entity structure allows for 99.9% tax credits and 0.1% management fees, ensuring a favorable cash flow. Explore the benefits of fixed fees and gross revenues for the GP/Manager and HTC investor, as well as the depreciation with basis adjustment. Discover the advantages of lease end-users and the master lease/credit pass-through arrangement. Beware of FIN 46 and get insights into property open issues and HTC basis adjustment.

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Maximizing Historic Preservation Tax Credits with Master Tenant Syndication

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  1. Historic Preservation Tax CreditsThe Next Level: “Master Tenant” Syndication

  2. Single Entity Structure GP/Manager Investor 99.9% Tax Credits 0.1% Management Fees, etc. Owner (LP or LLC) Development Fee Developer Fee Ownership Property Lease Lease End User End User

  3. Single Entity Structure Cash Flow: 1. Fixed Fees 2. Gross Revenues GP/Manager HTC Investor 99.9% Tax Credits 0.1% Management Fees, etc. 1. HTC 2. Cash Flow 3. Deprec. w/ Basis Adj. Owner (LP or LLC) Development Fee Developer Fee Ownership Property 1. HTC 2. Cash Flow 3. Deprec. w/ Basis Adj. Lease Lease End User End User

  4. Master Lease/Credit Pass-ThroughLessee Claims Credit Development Fee Developer Owner/Lessor (Affiliate of GP/Manager) GP/Manager Investor Master Lease Funds 0.1% 99.9% Tax Credits Master Lessee (LP or LLC) Property Lease Lease End User End User

  5. Master Lease/Credit Pass-ThroughLessee Claims Credit Development Fee Developer Owner/Lessor (Affiliate of GP/Manager) 3. Depreciation HTC Investor Master Lease Funds 1. HTC GP/Manager 99.9% Tax Credits 1. HTC/Imputed Inc. 0.1% Master Lessee (LP or LLC) 3. Book Inc.-HTC Equity •Equity in Owner/Lessor • Loan to Owner/Lessor • Beware FIN 46 2. Cash Flow Property Open Issues: 4. HTC Basis Adj.? Lease Lease End User End User

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