Revenue Procedure 2014-12 (the "Rev Proc") which establishes a safe harbor for structure Federal Historic tax credit transactions provides guidance on the staging of capital contributions by the Historic Tax Credit investor. First, the Rev Proc requires that at least 20% of the tax credit investor's aggregate capital contribution be contributed before the project is placed in service. In this vein at least 75% of the tax credit investor's aggregate capital contribution must be fixed at the time of placement in service of the project. The effect of these two requirements of the Rev Proc is to limit the provision in the sponsor's partnership agreement or master tenant agreement which would adjust the capital required to be contributed by the tax credit investor to 25% of the scheduled investor capital contribution of the tax credit investor. Finally the Rev Proc provides an example to illustrate that the tax credit investor's expected fixed capital commitment may be conditioned upon the achievement of mutually agreed upon milestones (e.g., receiving National Park Service approvals, leasing the Building to tenants).

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