A Chief Counsel Advice (“CCA”) was recently released addressing the treatment of units in qualified low-income buildings for resident managers or maintenance personnel that pay rent or utilities. The Office of Chief Counsel confirmed that the payment of rent or utilities by resident managers or maintenance personnel occupying units in qualified low-income buildings did not result in the units being subject to the general-public-use requirement of Treasury Regulation Section 1.42-9 or in the units being treated as residential rental units (rather than as facilities reasonably required for the project). Whether the owner of the project charges rent, utilities, or both for a unit occupied by a resident manager is not relevant in determining the proper treatment of the unit. Under Revenue Rulings 92-61, 1992-2 C.B. 7 and 2004-82, Q&A-1, 2004-2 C.B. 350, units for resident managers or maintenance personnel are functionally related and subordinate to the residential rental units, and thus are treated as residential rental property. A copy of the CCA can be found here.
Under Code Section 6110, the analysis set forth in a CCA is legal advice provided to a requesting field or service center employee of the IRS or regional or district employee of the Office of Chief Counsel and may not be used or cited as precedent.