 |
 |
NEW
MARKETS
Tax Credit |
|
 New Markets Tax Credit
As
part of the Community Renewal Tax Relief Act of 2000, Congress created
the New Markets Tax Credit ("NMTC") program. The program is designed
to provide investment from the private sector into low-income communities.
A Community Development Fund which has been awarded NMTC's will invest
in Qualified Low-Income Community Investments which can be from loans
on commercial property or to businesses. These investments, along
with their normal economic incentives, will generate a tax credit.
The credit will be paid out over 7 years for a total of 39% of the
qualified investments the fund receives. The investors in the fund
will receive credits of 5% of investment for the first 3 years, followed
by 6% of investment for 4 years.
The initial allocation of $2.5 billion of tax credits was awarded
on March 14, 2003. The Community Development Enterprises which were
awarded credits vary greatly in their investment characteristics and
goals. Many have specific plans for the funds while others plan to
create national investment programs. Fallbrook will work with numerous
CDE's with varying programs, depending on the investment objectives
of our client investors.
|
|
