Type of Allocation

IRS IRC § 42 Audit Technique Guide — Part I (Introduction and Pre-Contact Analysis) · 2026 edition · updated 2026-07-29 · United States

The type of credit allocated to a building is dependent on two factors:

Whether the housing is newly constructed, an existing building, or an existing building that has been rehabilitated, and
Whether federal subsidies were used to construct or rehabilitate the building.

The possible combinations of the two characteristics are presented on Form 8609, lines 6a-e. The options are mutually exclusive so only one of the boxes should be marked on any one form. A building can receive more than one type of allocation, which requires the preparation of multiple Forms 8609.

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▸Contents — IRS IRC § 42 Audit Technique Guide — Part I (Introduction and Pre-Contact Analysis)

IRS IRC § 42 Audit Technique Guide — Part I (Introduction and Pre-Contact Analysis)

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