Form 8703 Annual Certification of a Residential Rental Project

Form

8703

(Rev. September 2013)
Department of the Treasury
Internal Revenue Service

Part I

Annual Certification of a Residential Rental Project
(Complete a separate Form 8703 for each project.)
For calendar year

▶

OMB No. 1545-1038

Information about Form 8703 and its instructions is at www.irs.gov/form8703.

Check if Amended Return

General Information

Operator of project

▶

Taxpayer identification number of operator

Street address, city or town, state or province, country, ZIP or foreign postal code
Owner of project

Taxpayer identification number of owner

Street address, city or town, state or province, country, ZIP or foreign postal code
Address of building/project (Do not use P.O. box.)

1

Report number (For IRS Use Only)

Check the box for the test elected for the project:
a

20-50 test

b

40-60 test

d

20-60 test
(GO Zone, Midwestern disaster areas,
and Hurricane Ike disaster areas only)

e

40-70 test
(GO Zone, Midwestern disaster areas,
and Hurricane Ike disaster areas only)

2

Date (MM/DD/YYYY) the qualified project period began .

.

.

.

c

.

.

.

.

.

.

.

.

.

.

25-60 test (NYC only)

.

▶

3a Was a low-income housing credit allocation issued by a housing credit agency for this project? . ▶
b If “Yes,” enter the building identification number (BIN) assigned to the building by the housing credit
agency (see instructions) . . . . . . . . . . . . . . . . . . . . . . . . . ▶
Check “Yes” if during the year reported on this form, there were no residential units in the project that were
occupied by a new resident whose income exceeds the applicable income limit. If otherwise, check “No.” ▶

4

/

/

Yes

▶

No

Yes

▶

No

If “Yes,” complete lines 5, 11, 12, and 13 in Part II, and skip lines 6 through 10.

Part II

Annual Determinations

5

Total number of residential rental units in project .

6

Number of units actually occupied by individuals whose income does not exceed the applicable
income limit (see instructions) . . . . . . . . . . . . . . . . . . . . . .

6

Number of units occupied by continuing residents whose income is treated as not exceeding
the applicable income limit (see instructions) . . . . . . . . . . . . . . . . .

7

8

Total number of low-income units in project (add lines 6 and 7) .

8

9

Divide line 8 by line 5 and enter the percentage (If the line 9 percentage is less than the
percentage for the test elected in Part I, item 1 (i.e., 20%, 40%, or 25%), see instructions.) . .

7

10

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

5

9

%

Deep-rent skewed project election (see instructions):
a

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

10a

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

10b

11

Number of low-income units vacated during the calendar year

.

.

.

.

.

.

.

.

.

.

.

11

12

Number of low-income units vacated during the calendar year and occupied by new residents
who were low-income residents at the time of occupancy . . . . . . . . . . . . .

12

Number of low-income units that were vacated but were held available for low-income residents
as of the end of the calendar year . . . . . . . . . . . . . . . . . . . . .

13

Number of 40%-and-under low-income units .

b Divide line 10a by line 8 and enter the percentage

13

.

For Privacy Act and Paperwork Reduction Act Notice, see back of form.

Cat. No. 64650C

%

Form 8703 (Rev. 9-2013)

Page 2

Form 8703 (Rev. 9-2013)

Issuer and Description of Bonds (see instructions)

Part III
14

Name of issuer

15

Issuer's EIN

16

Name of bond issue

17

Date of bond issue

18

CUSIP number

19

Issue price

20

Final maturity date

/

/

/

Certification (see instructions)

Part IV

Paid
Preparer
Use Only

Date

Signature of Project Operator
Print/Type preparer’s name

Preparer's signature

▲

Under penalties of perjury, I certify that the above project (check one) continues to meet ▶
does not meet ▶
the requirements of
subsection 142(d) of the Internal Revenue Code and that I have examined this form, and to the best of my knowledge and belief, the
information is true, correct, and complete.

▲

Sign
Here

/

Date

Type or print name and title
Check
if
self-employed

Firm’s name

▶

Firm's EIN

Firm's address

▶

Phone no.

PTIN

▶

Form 8703 (Rev. 9-2013)

Page 3

Form 8703 (Rev. 9-2013)

Future Developments
The IRS has created a page on IRS.gov for
information about Form 8703 and its
instructions, at www.irs.gov/form8703.
Information about any future developments
affecting Form 8703 (such as legislation enacted
after we release it) will be posted on that page.

General Instructions
Section references are to the Internal Revenue
Code unless otherwise noted.
Purpose of form. Form 8703 is used by an
operator of a residential rental project to
provide annual information the IRS will use to
determine whether a project continues to be a
qualified residential rental project under
section 142(d). If so, and certain other
requirements are met, bonds issued in
connection with the project are considered
“exempt facility bonds” and the interest paid
on them is not taxable to the recipient.
Who must file. The operator of a residential
rental project for which an election was made
under section 142(d) must file Form 8703
annually. A separate Form 8703 must be filed
for each project.
When to file. File Form 8703 by March 31
after the close of the calendar year for which
the certification is made. Form 8703 must be
filed annually during the qualified project
period. See the instructions for line 2 for the
definition of “qualified project period.”
Where to file. File Form 8703 with the:
Internal Revenue Service
Service Center
Ogden, UT 84201
Penalty. Section 6652(j) provides for a penalty
of $100 for each failure to comply with the
section 142(d)(7) certification requirements
unless it can be shown that failure to file is due
to reasonable cause and not to willful neglect.
Questions on filing Form 8703. For specific
questions on how to file Form 8703, send an
email to the IRS at:
[email protected]
Put "Form 8703 Question" in the subject
line. In the email, include a description of your
question, a return email address, the name of
a contact person, and a telephone number.

Specific Instructions
Part I—General Information
Enter the name, address (including ZIP or
foreign postal code), and taxpayer identification
number of both the operator and the owner of
the project. Enter the address of the project. Do
not use P.O. boxes.
Amended return. An issuer may file an
amended return to change or add to the
information reported on a previously filed
return for the same date of issue. If you are
filing to correct errors or change a previously
filed return, check the "Amended Return" box
in the heading of the form.

The amended return must provide all the
information reported on the original return, in
addition to the new or corrected information.
Attach an explanation of the reason for the
amended return.
Report number. This line is for IRS use only.
Do not make an entry.
Line 1. To be a qualified residential rental
project, one of the following tests must have
been elected for the project:
(a) 20-50 test. 20% or more of the residential
units must be occupied by individuals whose
income is 50% or less of the area median
gross income.
(b) 40-60 test. 40% or more of the residential
units must be occupied by individuals whose
income is 60% or less of the area median
gross income.
(c) 25-60 test (NYC only). 25% or more of the
residential units must be occupied by
individuals whose income is 60% or less of the
area median gross income.
(d) 20-60 test (Gulf Opportunity (GO) Zone,
Midwestern disaster areas, and Hurricane
Ike disaster areas only). 20% or more of the
residential units must be occupied by
individuals whose income is 60% or less of the
area median gross income.
(e) 40-70 test (GO Zone, Midwestern disaster
areas, and Hurricane Ike disaster areas
only). 40% or more of the residential units must
be occupied by individuals whose income is
70% or less of the area median gross income.
See Rev. Rul. 94-57, 1994-2 C.B. 5, for
guidance on computing the income limits
applicable to these tests. See Pub. 4492,
Information for Taxpayers Affected by
Hurricanes Katrina, Rita, and Wilma, for details
about the GO Zone. See Pub. 4492-B,
Information for Affected Taxpayers in the
Midwestern Disaster Areas, for details about the
Midwestern Disaster areas.
Line 2. The qualified project period is the
period beginning on the first day that 10% of
the residential units are occupied and ending on
the latest of (a) the date that is 15 years after the
date that 50% of the residential units are
occupied, (b) the first day that no tax-exempt
private activity bond issued for the project is
outstanding, or (c) the date that any assistance
provided for the project under section 8 of the
United States Housing Act of 1937 terminates.
Lines 3a and 3b. If a low-income housing
credit allocation was issued for more than one
building in the project, attach a schedule
listing the building identification number (BIN)
for each building.
Line 4. The determination of whether the
income of a resident of a unit in a project
exceeds the applicable income limit shall be
made at least annually on the basis of the
current income of the resident, except for
respect to any project for any year if during
such year no residential unit in the project is
occupied by a new resident whose income
exceeds the applicable income limit. See
section 142(d)(3)(A). Check "Yes" if there are
no new residents in the project whose income
exceeds the applicable income limits.
Therefore, if “Yes” is checked, complete Part
II, skipping lines 6 through 10.

Part II—Annual Determinations
Line 5. Enter the total number of residential
rental units in the project.
Line 6. Enter the number of residential rental
units occupied by individuals whose income
is:
(a) 50% or less of the area median gross
income (if box 1a was checked),
(b) 60% or less of the area median gross
income (if box 1b, 1c, or 1d was checked),
or
(c) 70% or less of the area median gross
income (if box 1e was checked).
Do not include any units included on line 7.
Line 7. Enter the number of residential rental
units occupied by continuing residents whose
income exceeds the applicable income limit
but whose income is treated as not exceeding
the applicable income limit. Do not include
any units included on line 6. See section
142(d)(3)(B).
Line 9. If line 9 is less than the percentage for
the test elected in item 1, Part I (i.e., 20%,
40%, or 25%), the project is considered in
post-issuance noncompliance. In this case,
check the box in Part IV to certify that the
project “does not meet” the requirements of
section 142(d).
In general, unless the noncompliance is
corrected within a reasonable period, the
noncompliance will cause the exempt facility
bonds for the project to not be qualified
bonds under section 141. When the bonds
are no longer qualified, the interest paid or to
be paid on the bonds is taxable, and the
issuers or brokers of the bonds must report
the taxable interest to bond holders as
required by section 6049. See Regulations
sections 1.103-8(b)(1)-(9) and sections 141,
142, and 103 for additional information.
Lines 10a and 10b. Complete these lines only
if an election was made to treat the project as
a deep-rent skewed project under section
142(d)(4). The 15-40 test that applies to the
deep-rent skewed project election is not an
additional test for satisfying the requirements
of section 142(d)(1). The 15-40 deep-rent
skewed project test relates to the
determination of a low-income tenant’s
income. Generally, a continuing resident’s
income may increase but not exceed 140% of
the applicable income limit (i.e., 50% or less
or 60% or less of the area median gross
income under the line 1a or 1b test). When
the deep-rent skewed election is made and
the requirements of section 142(d)(4)(B) are
met, the income of a continuing resident may
increase up to 170% of the applicable income
limit. If this election is made, at least 15% of
all low-income units in the project must be
occupied by tenants whose income is 40% or
less of the area median gross income.
On line 10a, enter the number of
low-income units occupied by individuals
whose income is 40% or less of the area
median gross income. Also include the
number of units occupied by continuing
residents whose income is treated as not
exceeding the applicable income limit. If the
percentage on line 10b is less than 15%, the
project is not a deep-rent skewed project, and
a continuing resident’s income may not
increase above 140% of the applicable
income limit for purposes of section 142(d).

Page 4

Form 8703 (Rev. 9-2013)

Line 11. Enter the number of low-income
units vacated during the calendar year.
Line 12. Enter the number of vacated
low-income units that were occupied by new
residents who were low-income residents at
the time of occupancy. The instructions for
lines 6 and 7 describe low-income residents.
Line 13. Enter the number of vacant
low-income units that were held available for
low-income residents as of the end of the
calendar year.
Note. Lines 11 through 13 ask questions
about low-income units that were vacated
during the calendar year. Regulations sections
1.103-8(b)(5)(i) and (ii) provide, that lowincome units must be rented or available for
rent on a continuous basis by low-income
tenants during the longer of: (a) the remaining
term of the bond, or (b) the qualified project
period. If lines 12 and 13 do not add up to line
11, then make a determination as to whether
the project is in compliance with the
requirements of section 142(d). If it is
determined that the project is not in
compliance, check the box in Part IV to certify
that the project "does not meet" the
requirements of section 142(d).

Line 18. Enter the CUSIP (Committee on
Uniform Securities Identification Procedures)
number of the bond with the latest maturity. If
the issue does not have a CUSIP number,
write "None." The CUSIP number should be
identical to the CUSIP number listed on Form
8038, Part I, line 9, filed with respect to the
bond issue.
Line 19. Enter the issue price of the bond
issue. The issue price of bonds is generally
determined under Regulations section
1.148-1(b). Thus, when issued for cash, the
issue price is the first price at which a
substantial amount of the bonds are sold to
the public. To determine the issue price of an
obligation issued for property, see sections
1273 and 1274 and the related regulations.
The issue price should be identical to the
issue price listed on Form 8038, Part III, line
21(b), filed with respect to the bond issue.
Line 20. The final maturity date is the last date
the issuer must redeem the entire issue. Enter
the date in an MM/DD/YYYY format. The final
maturity date should be identical to the final
maturity date listed on Form 8038, Part III, line
21(a), filed with respect to the bond issue.

Part III—Issuer and Description of
Bonds

Section 142(d)(7) requires the operator of the
project to submit this annual certification as to
whether the project continues to meet the
requirements of section 142(d). This form must
be signed by the operator of the project.

If the project for which you are filing Form
8703 has been financed by more than one
tax-exempt bond issue, attach a separate
statement containing the information required
in Part III, lines 14 through 20, for each bond
issue.
Line 14. The issuer's name is the name of the
entity issuing the bonds, not the name of the
entity receiving the benefits of the financing.
The name of the issuer should be identical to
the name listed on Form 8038, Part I, line 1,
filed with respect to the bond issue.
Line 15. Enter the issuer's employer
identification number (EIN). The issuer's EIN
should be identical to the EIN listed on Form
8038, Part I, line 2, filed with respect to the
bond issue.
Line 16. Enter the name of the bond issue. If
there is no name of the issue, please provide
other identification of the issue. The name of
the bond issue should be identical to the
name listed on Form 8038, Part I, line 8, filed
with respect to the bond issue.
Line 17. Enter the date of the bond issue.
Enter the date in an MM/DD/YYYY format.
The date of the bond issue is generally the
date on which the issuer physically
exchanges the bonds for the underwriter's (or
other purchaser's) funds. The issue date
should be identical to the issue date listed on
Form 8038, Part I, line 7, filed with respect to
the bond issue.

Certification

Paid Preparer
If an authorized officer of the operator filled in
this return, the paid preparer's space should
remain blank. Anyone who prepares the return
but does not charge the organization should not
sign the return. Certain others who prepare the
return should not sign the return. For example, a
regular full-time employee of the operator, such
as a clerk, secretary, etc., should not sign.
Generally, anyone who is paid to prepare a
return must sign it and fill in the other blanks in
the Paid Preparer Use Only area of the return.
The paid preparer must: Sign the return in the
space provided for the preparer's signature,
enter the preparer information, and give a copy
of the return to the operator.

Privacy Act and Paperwork Reduction
Act Notice
We ask for the information on this form to carry
out the Internal Revenue laws of the United
States. Code section 142(d)(7) requires that an
annual certification be filed with the IRS to
determine whether the legal requirements of that
section are being met. Routine uses of the
information provided on this form include giving
it to the Department of Justice for civil and
criminal litigation and to other federal agencies,
as provided by law. We may disclose the
information to cities, states, the District of
Columbia, and U.S. commonwealths or
possessions to administer their tax laws. We
may also disclose the information to foreign
governments pursuant to tax treaties or to
federal and state agencies to enforce federal
nontax criminal laws and to combat terrorism. If
you do not provide this form or all of the
information requested on it, you may be subject
to penalties.
To ensure proper identification of the owner
and operator of the project, Code section 6109
and its regulations require an identifying
number (social security number (SSN) or
employer identification number (EIN)) on the
annual certification.
You are not required to provide the
information requested on a form that is subject
to the Paperwork Reduction Act unless the form
displays a valid OMB control number. Books or
records relating to a form or its instructions must
be retained as long as their contents may
become material in the administration of any
Internal Revenue law. Generally, return
information is confidential, as required by Code
section 6103.
The time needed to complete and file this
form will vary depending on individual
circumstances. The estimated average time is:
Recordkeeping . . . . . 7 hr., 39 min.
Learning about the law
or the form . . . . . . 1 hr., 51 min.
Preparing and sending the
form to the IRS . . . . . 3 hr., 16 min.
If you have comments concerning the
accuracy of these time estimates or
suggestions for making this form simpler, we
would be happy to hear from you. You can send
your comments to:
Internal Revenue Service
Tax Forms and Publications Division
1111 Constitution Ave. NW, IR-6526
Washington, DC 20224
Do not send the form to this address.
Instead, see Where to file, earlier.