New York Laws
Article 1 - Short Title; Definitions; Miscellaneous
18 - Low-Income Housing Credit.

(b) Credit recapture. (1) General. If,
(A) as of the close of any taxable year in the compliance period, the
amount of the qualified basis of any building with respect to the
taxpayer is less than
(B) the amount of such basis as of the close of the preceding taxable
year,
(C) then the credit recapture amount must be added back for the
taxable year.
(2) Credit recapture amount. The credit recapture amount is an amount
equal to the sum of
(A) the aggregate decrease in the credits allowed to the taxpayer
under this section for all prior taxable years which would have resulted
if the accelerated portion of the credit allowable by reason of this
section were not allowed for all prior taxable years with respect to the
excess of the amount described in subparagraph (B) of paragraph (1) of
this subdivision over the amount described in subparagraph (A) of such
paragraph, plus
(B) interest at the overpayment rate established under section one
thousand ninety-six of this chapter on the amount determined under
subparagraph (A) of this paragraph for each prior taxable year for the
period beginning on the due date for filing the report for the prior
taxable year involved.
(3) Accelerated portion of credit. For purposes of paragraph two of
this subdivision, the accelerated portion of the credit for the prior
taxable years with respect to any amount of basis is the excess of
(A) the aggregate credit allowed by reason of this section (without
regard to this subdivision) for such years with respect to such basis,
over
(B) the aggregate credit which would be allowable by reason of this
section for such years with respect to such basis if the aggregate
credit which would (but for this subdivision) have been allowed for the
entire compliance period were allowable ratably over fifteen years.
(4) Special rules. For purposes of this subdivision, the rules of
section 42 (j)(4)(B) and (C) of the internal revenue code shall apply in
determining the credit recapture amount.
(5) Exceptions to recapture. Recapture under this subdivision shall
not apply to a reduction in qualified basis
(A) by reason of a casualty loss, if the commissioner, in consultation
with the commissioner of housing and community renewal, determines that
such loss is restored by reconstruction or replacement within a
reasonable period, or
(B) by reason of a change in floor space devoted to low-income units
in a building, if such building remains an eligible low-income building
after such change, and if the commissioner, in consultation with the
commissioner of housing and community renewal, determines that such
change is de minimis, or
(C) by reason of error in complying with low-income eligibility tests
referred to in subdivision five of section twenty-one of the public
housing law, if the commissioner, in consultation with the commissioner
of housing and community renewal, determines that such error is de
minimis.
(6) Recapture by partners of a partnership. In the case of ownership
of a building or interest therein by a partnership which has thirty-five
or more partners, the provisions of section 42(j)(5) of the internal
revenue code shall apply to any recapture under this subdivision unless
the partnership elects not to have such provisions apply.
(6-a) The taxpayer that originally received the credit shall remain
solely liable for all obligations and liabilities imposed on the
taxpayer with respect to the credit, none of which shall apply to a
party to whom the credit has been subsequently transferred.
(7) (A) The credit recapture required under this subdivision will not
apply solely by reason of the disposition of a building or an interest
therein if it is reasonably expected that such building will continue to
be operated as an eligible low-income building for the remaining
compliance period with respect to such building.
(B) Statute of limitations. If a building (or an interest therein) is
disposed of during any taxable year and there is any reduction in the
qualified basis of such building which results in an increase in tax
under this section for such taxable or any subsequent taxable year, then
(i) the statutory period for the assessment of any deficiency with
respect to such increase in tax will not expire before the expiration of
three years from the date the commissioner of housing and community
renewal is notified by the taxpayer (in such manner as the commissioner
of housing and community renewal may prescribe) of such reduction in
qualified basis, and
(ii) such deficiency may be assessed before the expiration of such
three-year period notwithstanding the provisions of any other law or
rule of law which would otherwise prevent such assessment.
(c) Construction with public housing law; definitions. The provisions
of this section shall be construed in conjunction with the provisions of
article two-A of the public housing law. For definitions relating to the
low-income housing credit, see section twenty-one of such law.
(d) Cross-references. For application of the credit provided for in
this section, see the following provisions of this chapter:
(1) Article 9-A: Section 210-B: subdivision 15,
(2) Article 22: Section 606: subsections (i) and (x),
(3) Article 33: Section 1511: subdivision (n).

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