(a) In general

Section 47(a) of the Internal Revenue Code of 1986 is amended to read as follows:

(a) General rule

For purposes of section 46, the rehabilitation credit for any taxable year is 20 percent of the qualified rehabilitation expenditures.

(b) Effective date

The amendment made by this section shall apply to property placed in service after December 31, 2023.

(a) In general

Section 47 of the Internal Revenue Code of 1986 is amended by adding at the end the following new subsection:

(e) Special rule regarding certain small projects

(1) In general

In the case of any qualifying small project with respect to which there is an election in effect under this subsection—

(A)

the total qualified rehabilitation expenditures taken into account for purposes of this section with respect to the rehabilitation shall not exceed $3,750,000,

(B)

subsection (a) shall be applied by substituting 30 percent for 20 percent, and

(C)

subject to paragraph (4) and such regulations or other guidance as the Secretary may provide, the taxpayer may transfer all or a portion of the credit determined under this section with respect to such qualifying small project.

(2) Qualifying small project

For purposes of this subsection, the term qualifying small project means any qualified rehabilitated building or portion thereof if—

(A)

such building is placed in service after the date of the enactment of this subsection, and

(B)

no credit was allowed under this section (other than a credits allowed by reason of subsection (d)) for either of the two immediately preceding taxable years with respect to such building.

(3) Special rule for rural projects

(A) In general

In the case of any qualifying small project in a rural area, paragraph (1)(A) shall be applied by substituting $5,000,000 for $3,750,000.

(B) Rural area

For purposes of this subparagraph, the term rural area means any area other than—

(i)

a city or town that has a population of greater than 50,000 inhabitants, or

(ii)

the urbanized area contiguous and adjacent to a city or town described in clause (i), as defined by the Bureau of the Census based on the latest decennial census of the United States.

(4) Transfer of credit for qualifying small projects

(A) Certification

(i) In general

A transfer under paragraph (1)(C)) shall be accompanied by a certificate which includes—

(I)

the certification for the certified historic structure referred to in subsection (c)(3),

(II)

the taxpayer’s name, address, tax identification number, date of project completion, and the amount of credit being transferred,

(III)

the transferee’s name, address, tax identification number, and the amount of credit being transferred, and

(IV)

such other information as may be required by the Secretary.

(ii) Transferability of certificate

A certificate issued under this subsection to a taxpayer shall be transferable to any other taxpayer.

(B) Tax treatment relating to certificate

(i) Disallowance of deduction

No deduction shall be allowed for the amount of consideration paid or incurred by the transferee.

(ii) Allowance of credit

The amount of credit transferred under paragraph (1)(C)—

(I)

shall not be allowed to the transferor for any taxable year, and

(II)

shall be allowable to the transferee as a credit determined under this section for the taxable year of the transferee in which such credit is transferred.

(iii) Exclusion

Gross income shall not include any amount received in connection with the transfer of the certificate.

(C) Recapture and other special rules

The taxpayer who claims a credit determined under this section by reason of a transfer of an amount of credit under paragraph (1)(A) with respect to an applicable rural project shall be treated as the taxpayer with respect to such project for purposes of section 50.

(D) Information reporting

The transferor and the transferee shall each make such reports regarding the transfer of an amount of credit under paragraph (1)(C) and containing such information as the Secretary may require. The reports required by this subparagraph shall be filed at such time and in such manner as may be required by the Secretary.

(E) Regulations

The Secretary shall prescribe regulations or other guidance to carry out paragraph (1)(C) and this paragraph in a manner which is consistent with applicable requirements with respect to transfer of credits under section 6418.

(5) Election

An election under this subsection shall be made at such time and in such manner as the Secretary may by regulations prescribe.

(b) Effective date

The amendment made by this section shall apply to property placed in service after the date of the enactment of this Act.

(a) In general

Section 47(c)(1)(B)(i)(I) of the Internal Revenue Code of 1986 is amended by inserting 50 percent of before the adjusted basis.

(b) Effective date

The amendment made by subsection (a) shall apply to property placed in service after the date of the enactment of this Act..

(a) In general

Section 50(c) of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph:

(6) Exception for rehabilitation credit

In the case of the rehabilitation credit, paragraph (1) shall not apply.

(b) Treatment in case of credit allowed to lessee

Section 50(d) of such Code is amended by adding at the end the following: In the case of the rehabilitation credit, paragraph (5)(B) of the section 48(d) referred to in paragraph (5) of this subsection shall not apply..

(c) Effective date

The amendments made by this section shall apply to property placed in service after the date of the enactment of this Act.

(a) In general

Section 47(c)(2)(B)(v) of the Internal Revenue Code of 1986 is amended by adding at the end the following new subclause:

(III) Disqualified lease rules to apply only in case of government entity

For purposes of subclause (I), except in the case of a tax-exempt entity described in section 168(h)(2)(A)(i), the determination of whether property is tax-exempt use property shall be made under section 168(h) without regard to whether the property is leased in a disqualified lease (as defined in section 168(h)(1)(B)(ii)).

(b) Effective date

The amendments made by this section shall apply to property placed in service after the date of the enactment of this Act.