If you own a building that is considered historic in the state of Missouri, you are eligible to gain beneficial tax credits on your annual return. Missouri is often praised for this law, which helps stimulate growth in cities that have a large amount of historic buildings that may be abandoned or otherwise ignored.
The National Register of Historic Places will require that you be placed in their list of historic buildings before the state of Missouri will recognize your property as historic. If you aren’t sure on how to do such a thing, most business accountants are able to help you through it. Even if you don’t have a property that was substantial to history, it can be considered as a possible entry to the list if it has some sort of cultural meaning or other close ties to the surrounding community.
Under the tax credit, you will be able to gain up to 25% of the total renovation costs in tax credits. This is a rather substantial amount of money that can turn an unaffordable renovation project into one that can be easily afforded. Even still, the total cost must exceed at least 50% of the owner’s basis in the building- so there is a minimum cost to meet.
If you know of a few investors who wouldn’t mind taking your tax credits, you can get a lump sum rather quickly in transferring the tax credit to such investors. This will enable you to better fund your project, and increase the odds of it being finished without financial problems. If you don’t know anyone, look online or go to a local investment agency.
Don’t view the tax credits as an easy break to do what you would like in a project- you will have to adhere to certain rules in what counts as a renovation and what doesn’t. The state of Missouri is actually fairly lenient in the matter- allowing for even insurance premiums to be counted in the overall costs. You will still have to keep out fences, walkways, and landscaping fees among others- so be sure you know what can be counted and what isn’t.
You may combine these tax credits with others if you would like- meaning you can get a high return in tax credits if you work with an accountant that is keen on getting you the most substantial amount of reimbursement possible. As such, you will likely want to work with an accountant that has an established practice where you live.
Final Thoughts
Even if you decide to outsource the work of applying for tax credits to professional help, you should remain at least somewhat knowledgeable about the subject so that you can make wise decisions on where to take your renovation project after you get it up and going.
Learn more about Missouri Full Service Tax Credit Syndication and Missouri Historic Tax Credit Broker.