Characterization of Employee Units When Charging Rent, Utilities

The IRS recently released a memorandum issued by the Office of Chief Counsel dated June 2, 2014, which addressed circumstances that could affect the eligibility of employee units such as manager or maintenance personnel units in a LIHTC site to qualify for the tax credit. Specifically, the memo discussed the effect of charging rent to resident managers and maintenance personnel and whether, by doing so, those units could be characterized as “residential rental units.”