Please refer to the Year End Reporting Deadlines to ensure each Partnership meets its reporting deadlines for all Tax Returns and required supporting documentation. All submission should be uploaded via the NEF CPA Portal (preferred) or via email to firstname.lastname@example.org.
For certain Partnerships, a copy of the executed Engagement Letter is required to be submitted to NEF by the Year End Reporting Deadline. In addition to the Partnerships listed on the referenced spreadsheet, if a Partnership engaged a new CPA for the current year-end reporting, please submit a copy of the executed Engagement Letter to NEF.
General Tax Return Notes
- If NEF Assignment Corporation is the Limited Partner
- On Schedule K-1:
- Part II, Line F: please include “NEF Assignment Corp, acting as Nominee”
- Part II, Line I1: please indicate Nominee – C (or “tax-exempt entity” or “other”, if Nominee is not available in your tax software)
- On Schedule B-1:
- NEF Assignment Corp will be listed
- There should be at least one additional partner, if not two, listed as NEF Assignment Corp is a pass-through entity
- On Schedule M-3:
- NEF Assignment Corp will NOT be listed; NEF Assignment Corp is not required to include Schedule M-3 in its federal tax return, and therefore, it doesn’t meet the requirements to be disclosed in the Partnership’s tax return.
- The additional partner(s) that are listed on Schedule B-1 should also be included on Schedule M-3.
- If NEF Assignment Corporation is NOT the Limited Partner
- There may still be additional partner(s) listed on Schedule B-1 and Schedule M-3
- If NEF entered the partnership in the current year, please contact Brandon Harington, NEF Manager of Financial Analysis, by email at email@example.com to obtain any additional partner(s) to be included.
- Schedule K-1 – Line 15 credits should be reported on either Line 15B or Line 15D depending on the date the building was placed in service.
- Disposition of LP Interest – If the NEF Limited Partner disposed of its interest in the Partnership during the fiscal year, the tax return should include a K-1 for the NEF Limited Partner with the “Final K-1” checkbox marked. The NEF Limited Partner K-1 must also reflect the wind up of operations as indicated by $0 ending capital account balance (and by 0% ending partner share, preferred).
- First Year Credit Calculation – NEF requests that when a partnership is delivering first year tax credits, but the 8609s have not yet been received, that the draft tax return includes the estimated credits to be delivered by the partnership. Additionally, please submit a detailed calculation of the estimated credits to be reported on the tax return along with the draft tax return. NEF will need to review the credit calculation, verify the information provided with NEF’s records and reconcile any differences. To keep the process moving along quickly, please be sure to submit the credit calculation along with the draft tax return by uploading the detailed credit calculation via the CPA Portal under the “Credit Calculation” line.
- Federal Tax Depreciation Schedule– Please attach this schedule to the tax return.
- GAAP to Tax Reconciliation – NEF is requesting that all Partnerships convert the Partner’s capital account analysis located in Section L of the Schedule K-1 on a TAX BASIS. The preferred conversion presentation is as follows.
1/1/19 GAAP balance + CY Capital Contributed + CY Net Income (Loss) +/- Other Increase (include cumulative GAAP to TAX adjustments) – CY Distributions = 12/31/19 TAX balance
- Minimum Gain Analysis – Per IRS Regulations, the Partner’s capital accounts should be tracked on a tax basis in order to perform a yearly minimum gain analysis (IRC Section 704(b)). Please upload a completed copy of the CPA’s Minimum Gain Analysis via the CPA Portal under the “Minimum gain Analysis” line.
- Elections – NEF requests the following elections be included, as applicable
- Adopt recurring item exception (IRC Section 461)
- Capitalize Real Estate Taxes (IRC Section 461(c))
- De minimis Safe Harbor (IRC Section 1.263(A) – 1(F)
- Capitalized Repairs & Maintenance Costs (IRC Section 1.263 (A) – 3(N)
- Business Interest Expense Limitation (IRC Section 163(j)(7)(B) (if making the election)
- Bonus Depreciation (IRC Section 168(K) (If not taking bonus depreciation)
- Section 163(j) Election – Click here to download the list of Section 163(j) elections by partnership to be made in 2019.
- If the partnership is to elect out of business interest expense limitation (Make 163 (j) Election in 2019 = YES)
- Schedule B, Line 23 = YES
- Schedule B, Line 24 = NO
- The useful life for the buildings in 2019 must be adjusted to be consistent with the following original useful lives:
- 40 years for buildings PIS BEFORE 12/31/17
- 30 years for buildings PIS AFTER 12/31/17
- If the partnership is not to elect out of business interest expense limitation (Make 163 (j) Election in 2019 = NO)
- Schedule B, Line 23 = NO
- Schedule B, Line 24 = YES
- Form 8990 must be completed and included in the tax return that is submitted to NEF. Because the partnership is a pass-through entity, it is considered a tax shelter and therefore, must complete and file Form 8990
- Please note that it is critical that the Federal Tax Depreciation schedule is included in each partnership’s tax return when it is submitted to NEF. If it is not already included in the tax return, please be sure to submit it as an additional file.
- Partnership Representative Designation – NEF expects that an officer of the General Partner will serve as the Partnership Representative.
- Please include the General Partner’s name, address, the Designated Individual’s name and EIN on Form 1065, Schedule B, between line 25 and 26.
- For additional information related to the tax matters partner designation, please read the notice here.
If you need further information or wish to discuss any of the matters set forth herein, please contact Tracey LeGrand, NEF Vice President Financial Analysis, by email at firstname.lastname@example.org or by phone at (312) 697-6122.