Significant Tax Deductions for Commercial Rehabilitation Projects
On behalf of the City of Chicago, Office Budget and Management, CCV administers the allocation of Commercial Revitalization Deductions (CRD). These deductions enable for-profit businesses that construct or substantially rehabilitate commercial property in a Renewal Community to deduct a portion of the costs of acquisition and rehabilitation over a shorter period of time than allowed under the standard depreciation rules.
The amount of the deduction is based on 'qualifying revitalization expenditures' (QREs). Businesses can elect either a deduction of 50% of such QREs for any one project in the year the building is placed into service OR can deduct 100% of QREs pro rated over ten years.
CCV currently has $12 million set aside for projects started or completed in 2007. There is a $10 million per project limit for 'qualifying revitalization expenditures' and allocations are made based on availability of funds at the time of the request.
Interested parties should contact Doug Cannon at 773.822.0315 for more information about the Chicago CRD program.
More detailed information on CRDs can be found on pages 47-61 of the Tax Incentive Guide for Businesses in the Renewal Communities published by the U.S. Department of Housing and Urban Development.