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federalUnited StatesLow-Income Housing Tax Creditfees_and_charges

Non-optional fees count toward gross rent

lihtc.fees.non_optional_charges · v1.0.0

Charges that a tenant must pay as a condition of occupancy are part of gross rent for the Section 42 rent test, regardless of how the lease characterizes them. Fees for genuinely optional services are not.

Confidence
high
Effective from
1990-01-01
Last reviewed
2026-08-22

Evidence required

  • Executed lease agreement(exactly_one)
  • Rent roll(at_least_one)

Citations

All sources verified within 1 day
  • Internal Revenue Code Section 42 - Low-income housing credit
    42(g)(2)(A)
    statuteSource ↗verified 1d ago
  • Provision of services
    26 CFR 1.42-11(a), General rule, and (b)(1)
    regulationSource ↗verified 1d ago
  • Guide for Completing Form 8823, Low-Income Housing Credit Agencies Report of Noncompliance or Building Disposition
    Chapter XI, Category 11g, sections F.3. Fees - Provision of Services and F.4. Fees - Condition of Occupancy
    persuasive_agency_guidanceSource ↗verified 1d ago