Historic Structure

Definition

A historic structure is a building or edifice that has been officially recognized for its historical, architectural, or cultural significance. These structures often qualify for special tax incentives and are subject to regulations that aim to preserve and maintain their historical integrity.

Examples

The Empire State Building: Recognized not only for its architectural brilliance but also as a symbol of the American spirit.
Independence Hall in Philadelphia: Famous as the site where the Declaration of Independence and the United States Constitution were debated and adopted.
Monticello: The estate of Thomas Jefferson and a prime example of neoclassical architecture.

Tax Credits for Historic Structures

To incentivize the preservation of historic structures, the government offers tax credits such as:

20% Tax Credit: For the rehabilitation of certified historic structures. This applies to both residential and nonresidential buildings that have been certified by the appropriate authorities for their historic significance.
10% Rehabilitation Tax Credit: For nonresidential buildings placed in service before 1936, provided they meet certain criteria set forth by tax regulations.

Frequently Asked Questions (FAQs)

What qualifies a building as a historic structure?

To qualify as a historic structure, a building must be officially recognized or listed on the National Register of Historic Places, or located in a registered historic district and certified as significant to the district.

What is the benefit of a 20% tax credit for certified historic structures?

This tax credit allows building owners to deduct 20% of the qualified rehabilitation expenditures from their federal income taxes, effectively reducing the cost of preserving and rehabilitating historic properties.

How does a building qualify for the 10% rehabilitation tax credit?

For nonresidential buildings placed in service before 1936, qualifying for the 10% tax credit involves meeting specific preservation criteria, focusing mainly on maintaining the structure’s significant historic characteristics.

Are historic tax credits available for private residences?

The 20% tax credit for rehabilitation generally applies to income-producing properties, including residential rental and commercial properties. Private residences that are owner-occupied do not typically qualify.

Can state tax credits also be available for historic structures?

Yes, many states offer additional historic preservation tax incentives, which can be paired with federal tax credits to further support the financial feasibility of rehabilitation projects.

National Register of Historic Places: The official list of the United States’ historic places worthy of preservation.
Rehabilitation Tax Credit: A tax credit aimed at encouraging the rehabilitation and renovation of older, nonresidential buildings and certified historic structures.
Cultural Resource Management (CRM): The objective and systematic process to assess, protect, and manage cultural resources, including historic structures.

Online References

Suggested Books for Further Studies

“Preserving Historic Architecture: The Official Guidelines” by the U.S. Department of the Interior
“Historic Preservation: An Introduction to Its History, Principles, and Practice” by Norman Tyler, Ted J. Ligibel, and Ilene R. Tyler
“Building an American Identity: Pattern Book Homes & Communities, 1870-1900” by Linda E. Smeins

Fundamentals of Historic Structures: Business and Taxation Basics Quiz

### What is the typical tax credit percentage for the rehabilitation of certified historic structures? - [x] 20% - [ ] 10% - [ ] 15% - [ ] 5% > **Explanation:** A 20% tax credit is typically available for the rehabilitation of certified historic structures, making it an attractive incentive for the preservation of historically significant buildings. ### Which type of buildings additionally qualify for a 10% rehabilitation tax credit? - [ ] Certified historic structures only - [ ] Residential buildings regardless of age - [x] Nonresidential buildings placed in service before 1936 - [ ] Any building older than 50 years > **Explanation:** Nonresidential buildings placed in service before 1936 may qualify for a 10% rehabilitation tax credit under certain conditions, promoting the upkeep and use of older commercial structures. ### A historic structure must be officially recognized. Which register typically lists these properties? - [ ] National Association of Realtors - [ ] Local Chamber of Commerce - [ ] Zoning Board of Appeals - [x] National Register of Historic Places > **Explanation:** The National Register of Historic Places is the official list in the United States that designates properties worthy of preservation for their historical significance. ### Can the rehabilitation tax credit be applied to owner-occupied personal residences? - [ ] Yes, for any historic property - [x] No, typically it applies to income-producing properties - [ ] Only if the residence is more than 100 years old - [ ] Yes, but only if listed on the National Register > **Explanation:** The rehabilitation tax credit is generally targeted at income-producing properties, including commercial buildings and residential rental properties, rather than private, owner-occupied homes. ### What is a key criterion for a building to qualify as a certified historic structure? - [ ] Located in a downtown area - [x] Listed on the National Register of Historic Places or located in a registered historic district - [ ] Built before 1900 - [ ] Owned by a public entity > **Explanation:** A certified historic structure must either be listed on the National Register of Historic Places or be located in a registered historic district and recognized as having significance within that district. ### How do state historic tax credits typically interact with federal tax credits? - [ ] They cancel each other out - [ ] They can be applied separately but cannot be combined - [x] They can be used in conjunction, providing additional financial incentives - [ ] Only one type of credit can be claimed in a tax year > **Explanation:** State historic tax credits can often be combined with federal tax credits, offering additional financial incentives that can make historic preservation and rehabilitation projects more feasible. ### Why is preserving historic structures considered beneficial? - [ ] It allows for the use of outdated construction methods - [ ] It prevents any modernization of the built environment - [x] It preserves cultural heritage and architectural history - [ ] It exclusively supports tourism industries > **Explanation:** Preserving historic structures is beneficial because it helps maintain cultural heritage, architectural history, community character, and can contribute to local pride and tourism. ### Which federal agency administers the national historic preservation program? - [ ] Internal Revenue Service (IRS) - [x] National Park Service (NPS) - [ ] Environmental Protection Agency (EPA) - [ ] Department of Housing and Urban Development (HUD) > **Explanation:** The National Park Service administers the national historic preservation program, including overseeing the certification process for historic structures and the application of tax incentives. ### What does CRM stand for in the context of historic preservation? - [ ] Construction Resource Management - [ ] Cultural Routing Method - [x] Cultural Resource Management - [ ] Comprehensive Restoration Mandate > **Explanation:** Cultural Resource Management (CRM) is a field devoted to the assessment, protection, and management of cultural resources, including historic structures. ### What can property owners apply for to help fund the preservation of historic structures? - [ ] Standard building loans - [ ] Retail sales tax exemptions - [x] Preservation grants and tax credits - [ ] Environmental impact funds > **Explanation:** Property owners can apply for preservation grants and tax credits to financially support the preservation and rehabilitation of historic structures, helping offset some of the associated costs.

Thank you for exploring the intricate details of historic structures and tax credits through our comprehensive blueprint and challenging quiz questions. Continue to enhance your knowledge in the realm of historic preservation!