Hello,
I have a tax question that my accountant isn't sure on the answer. The info first: I am participating in a first time program offered by the city of Utica and will be receiving a $40,000 check from them which technically is a deferred payment loan. The program is identical to the federal Home Funds that is given for acquisition, new construction or rehabilitation of affordable rental housing in identified districts. The deferred loan is amortized over 10 years at 0% interest and as long as I meet all requirements of the loan program, each payment is forgiven. In other words, if I rent to a low-moderate income tenant at a reduced rent, I get "free" money. So how is this taxed? The city says no taxes will need to be paid on my end- the discounted rent is the loan "payment". I don't want any surprises and make sure this makes sense before I sign.....
Thanks!
I have a tax question that my accountant isn't sure on the answer. The info first: I am participating in a first time program offered by the city of Utica and will be receiving a $40,000 check from them which technically is a deferred payment loan. The program is identical to the federal Home Funds that is given for acquisition, new construction or rehabilitation of affordable rental housing in identified districts. The deferred loan is amortized over 10 years at 0% interest and as long as I meet all requirements of the loan program, each payment is forgiven. In other words, if I rent to a low-moderate income tenant at a reduced rent, I get "free" money. So how is this taxed? The city says no taxes will need to be paid on my end- the discounted rent is the loan "payment". I don't want any surprises and make sure this makes sense before I sign.....
Thanks!
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