The bond project is fixed by proximity, common ownership and a common plan of financing, not by an election

bond.unit_designation.project_definition_and_multiple_buildings · v1.0.0

A residential rental project is a building or structure, together with functionally related and subordinate facilities, containing one or more similarly constructed units used on other than a transient basis and available to the general public. Proximate buildings with similarly constructed units are treated as part of the SAME project if they are owned for Federal tax purposes by the same person and are financed pursuant to a common plan. Buildings are proximate if they sit on a single tract, meaning contiguous parcels, with a road, street or stream between parcels not defeating contiguity; a common plan of financing exists where the buildings are provided by the same issue or by several issues under a common indenture. Nothing here is elective. This is the central structural difference from section 42, where whether several buildings form one project is the taxpayer's choice recorded on Form 8609 line 8b. A bond deal can therefore be one project for 142(d) and several projects for section 42, or the reverse, on the same real estate.

Confidence

high

Effective from

1986-10-22

Last reviewed

2026-08-30