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Revenue Ruling

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Rev. Rul. 2004-16
Rev. Rul. 2004-16, 2004-8 I.R.B. 503
                       Internal Revenue Service (I.R.S.)
                                 Revenue Ruling
     LOW-INCOME HOUSING CREDIT; SATISFACTORY BOND; "BOND FACTOR" AMOUNTS FOR
                     THE PERIOD JANUARY THROUGH MARCH 2004
                          Published: February 23, 2004

 Section 42.--Low-Income Housing Credit

  Low-income housing credit; satisfactory bond; "bond factor" amounts for the period January through March 2004. This ruling announces the monthly bond factor amounts to be used by taxpayers who dispose of qualified low-income buildings or interests therein during the period January through March 2004.

  Low-income housing credit; satisfactory bond; "bond factor" amounts for the period January through March 2004. This ruling announces the monthly bond factor amounts to be used by taxpayers who dispose of qualified low-income buildings or interests therein during the period January through March 2004.

  In Rev. Rul. 90-60, 1990-2 C.B. 3, the Internal Revenue Service provided guidance to taxpayers concerning the general methodology used by the Treasury Department in computing the bond factor amounts used in calculating the amount of bond considered satisfactory by the Secretary under s 42(j)(6) of the Internal Revenue Code. It further announced that the Secretary would publish in the Internal Revenue Bulletin a table of bond factor amounts for dispositions occurring during each calendar month.

  Rev. Proc. 99-11, 1999-1 C.B. 275, established a collateral program as an alternative to providing a surety bond for taxpayers to avoid or defer recapture of the low-income housing tax credits under s 42(j)(6). Under this program, taxpayers may establish a Treasury Direct Account and pledge certain United States Treasury securities to the Internal Revenue Service as security.

  This revenue ruling provides in Table 1 the bond factor amounts for calculating the amount of bond considered satisfactory under s 42(j)(6) or the amount of United States Treasury securities to pledge in a Treasury Direct Account under Rev. Proc. 99-11 for dispositions of qualified low-income buildings or interests therein during the period January through March 2004.

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     Table 1 Rev. Rul. 2004-16 Monthly Bond Factor Amounts for
                                  Percentage of Total Credits
--------------------------------------------------------------
---------------------------------
 Dispositions Expressed As a
---------------------------------
       Calendar Year Building Placed in Service or, if Section 42(f)(1)
                                       Succeeding Calendar Year
-----------------------------------------------------------------------
Month  1990  1991  1992  1993  1994  1995  1996  1997  1998  1999  2000
 of
 Disposition
-----------------------------------------------------------------------
  Jan  14.-  27.-  38.-  47.-  55.-  54.-  54.-  53.-  53.-  53.-  52.-
  '04   71    31    15    40    27    52    00    57    27    01    84
  Feb  14.-  27.-  38.-  47.-  55.-  54.-  53.-  53.-  53.-  52.-  52.-
  '04   71    31    15    40    27    40    89    45    16    91    74
  Mar  14.-  27.-  38.-  47.-  55.-  54.-  53.-  53.-  53.-  52.-  52.-
  '04   71    31    15    40    27    28    77    34    05    81    65
-----------------------------------------------------------------------
Election Was Made, the
------------------------
  2001  2002  2003  2004
------------------------
  52.-  53.-  54.-  54.-
   99    40    02    15
  52.-  53.-  53.-  54.-
   90    30    92    15
  52.-  53.-  53.-  54.-
   81    22    83    15
------------------------

  For a list of bond factor amounts applicable to dispositions occurring during other calendar years, see: Rev. Rul. 98-3, 1998-1 C.B. 248; Rev. Rul. 2001-2, 2001-1 C.B. 255; Rev. Rul. 2001-53, 2001-2 C.B. 488; Rev. Rul. 2002-72, 2002-2 C.B. 759; and Rev. Rul. 2003-117, 2003-46 I.R.B. 1051.

DRAFTING INFORMATION

  The principal author of this revenue ruling is Gregory N. Doran of the Office of Associate Chief Counsel (Passthroughs and Special Industries). For further information regarding this revenue ruling, contact Mr. Doran at (202) 622-3040 (not a toll-free call).

 Rev. Rul. 2004-16, 2004-8 I.R.B. 503