New Market Tax Credits

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New Market Tax Credits

Consistent with our cutting edge focus and drive for client value, we recognized early on the opportunity for our clients to take advantage of a unique program adopted by Congress in 2000. The New Markets Tax Credit (NMTC) program is federal tax subsidy program administered by the Community Development Financial Institutions (CDFI) Fund and the Department of the Treasury that provides businesses with access to affordable credit, capital and financial services. The NMTC program promotes capital formation in low income communities and provides banks with a unique and effective tool to drive value for their customers, reduce overall tax burden, and improve Community Reinvestment Act (CRA) ratings.

From our initial representation of a borrower in a low-income community seeking to recapitalize its business and retain its workforce, our experience in this complex, niche practice area has developed into a full NMTC practice. Our experience in corporate finance and tax is a natural fit with the NMTC program, and our relationships with financial institutions and business owners creates opportunities for us to represent community development entities (CDEs), one-day lenders, qualified active low-income community businesses (QALICBs), and bank lenders involved in NMTC transactions

The NMTC Program provides tremendous opportunity to operating business and real estate projects in distressed communities and Kennedy Sutherland has the resources and experience to advise clients in managing and achieving the benefits of complex NMTC-advantaged transactions.

CDE Services:

  • Forming, certifying, and qualifying CDEs
  • NMTC allocation application assistance
  • Structuring and drafting of documents
  • Due diligence on projects
  • Assistance with management and compliance

QALICB Services:

  • Project structuring and documentation
  • Negotiating with CDEs and other NMTC parties
  • Coordinating closings
  • Legal opinions

Bank Services:

  • Representing bank lenders in NMTC transactions
  • One day loans

We also advise our clients of the tax issues involved in:

  • Reorganizations
  • Liquidations
  • Distributions
  • Affiliated group transactions
  • Stock and asset acquisitions and dispositions
  • Issues relating to cancellation of indebtedness income
  • The availability of loss carryovers
  • Other business deductions and credits
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