[Code of Federal Regulations]
[Title 26, Volume 1]
[Revised as of April 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR1.42-9]

[Page 165]
 
                       TITLE 26--INTERNAL REVENUE
 
     CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY
 
PART 1--INCOME TAXES--Table of Contents
 
Sec. 1.42-9  For use by the general public.

    (a) General rule. If a residential rental unit in a building is not 
for use by the general public, the unit is not eligible for a section 42 
credit. A residential rental unit is for use by the general public if 
the unit is rented in a manner consistent with housing policy governing 
non-discrimination, as evidenced by rules or regulations of the 
Department of Housing and Urban Development (HUD) (24 CFR subtitle A and 
chapters I through XX). See HUD Handbook 4350.3 (or its successor). A 
copy of HUD Handbook 4350.3 may be requested by writing to: HUD, 
Directives Distribution Section, room B-100, 451 7th Street, SW., 
Washington, DC 20410.
    (b) Limitations. Notwithstanding paragraph (a) of this section, if a 
residential rental unit is provided only for a member of a social 
organization or provided by an employer for its employees, the unit is 
not for use by the general public and is not eligible for credit under 
section 42. In addition, any residential rental unit that is part of a 
hospital, nursing home, sanitarium, lifecare facility, trailer park, or 
intermediate care facility for the mentally and physically handicapped 
is not for use by the general public and is not eligible for credit 
under section 42.
    (c) Treatment of units not for use by the general public. The costs 
attributable to a residential rental unit that is not for use by the 
general public are not excludable from eligible basis by reason of the 
unit's ineligibility for the credit under this section. However, in 
calculating the applicable fraction, the unit is treated as a 
residential rental unit that is not a low-income unit.

[T.D. 8520, 59 FR 10073, Mar. 3, 1994]