Additions to Qualified Basis
IRS IRC § 42 Audit Technique Guide — Part I (Introduction and Pre-Contact Analysis) · 2026 edition · updated 2026-07-29 · United States
Units first occupied by qualifying households after the end of the first year of the credit period will result in an increase in qualified basis. The units qualify for the credit, but the applicable percentage applied to the additional qualified basis is 2/3 of the applicable percentage shown on Form 8609, line 2. The computation of the credit allowable for increases to qualified basis is included on line 7 of the Form 8609-A filed with the tax return.
If the taxpayer is claiming credit for additions to qualified basis, then the taxpayer should provide a list of units first occupied by qualifying tenants after the end of the first year of the credit period and identify when qualifying households first occupied the units. See Chapter 13.
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