JANUARY–FEBRUARY The official publication of the 2018 Indiana Apartment Association INDIANA MARKET IN REVIEW IAA Hosts 16 Industry Summit NATIONAL FOCUS From the National Apartment Association, naahq.org Budget Agreement Extends Finally, Congress strongly considered push outs help ensure one partner does PAVING • SEALCOATING • CONCRETE Energy Efficiency Tax Incentives attaching tax incentives to expand and not become liable for another partner’s strengthen the Low-Income Housing tax obligations. Non-compliant partners As part of the budget agreement reached Tax Credit (LIHTC) in this legislative that do not either pay additional taxes on February 7 to keep the government package, but these were unfortunately due or push through liabilities to their open, two tax incentives that support not included in the final bill. NMHC/ own partners would remain liable for energy efficiency investments in NAA will continue to advocate for taxes owed. apartments, which expired in 2016, were strengthening LIHTC by making renewed through 2017. additional resources available to enable Apartment Industry Urges Tax The Energy Efficient Commercial the production of new units and Reform Depreciation Fix Buildings Deduction allows owners of allowing “income averaging” to make the NAA/NMHC are working to address buildings with four or more stories to program more flexible and support more an unintended consequence from last deduct between $0.60 and $1.80 per mixed-income housing. year’s tax reform legislation that could square foot when they install certain adversely affect owners of existing energy efficient systems, including IRS Issues Partnership Audit apartment properties. Specifically, the HVAC, lighting, and building envelope. and Taxation Rules tax law allows firms to choose whether The New Energy Efficient Home Credit The IRS has issued two important to deduct business interest, but if enables developers of new low-rise rental proposed rules that affect how they do decide to do so, they must housing properties (three stories or less) partnerships handle tax liability depreciate the property for 30 years to claim a $2,000 per-unit tax credit if following an audit. They are part of a instead of 27.5 years. those residences achieve a 50 percent series of rules implementing legislation energy savings for heating and cooling Unfortunately, the legislative language passed in 2015 that changed the way over the 2006 International Energy was incorrectly drafted and could be partnerships are audited. Conservation Code. read to only apply to properties placed Beginning in 2018 audits can occur at in service after 2017. Under that NMHC/NAA believe that lawmakers the partnership level. NAA/NMHC have interpretation, existing buildings that opt should not only permanently extend strongly supported allowing audited to deduct business interest would have to Experts in Commercial Maintenance both of these tax incentives, but they partnerships to push out adjustments be depreciated over 40 years. should also enact reforms to make the HASCO, Inc. is a full service commercial concrete and asphalt company through multiple tiers of partners. On Energy Efficient Commercial Buildings NAA/NMHC had successfully secured February 3, the IRS issued proposed serving the greater Indianapolis area and beyond. With more than 20 Deduction more effective. Specifically, the 30-year depreciation option, via rules that address how partnerships and years experience, we o er professional, skilled pavement and concrete the terms of the Deduction should be the amendment process, after seeing their partners adjust tax attributes to take expanded so property owners can qualify the 40-year option in the original services with an emphasis on high quality project completion. into account partnership adjustments by achieving significant, demonstrated draft. Unfortunately, the provision’s under the centralized partnership audit From parking lot paving and sealcoating to concrete repairs, our team improvements in energy performance effective date was changed for reasons regime. Previously, the IRS generally relative to a building’s own baseline unknown following Finance Committee will customize a solution to meet your needs and t your budget. held individuals within a partnership performance data rather than compared consideration as part of a substitute responsible for their share of tax liability. Contact us for a free, no obligation estimate today. to a specific energy code. amendment on the Senate floor when the On December 15, 2017, the IRS issued entire Senate was voting on the bill. The future prospects for these deductions a proposed partnership audit regulation are unclear. The House Ways and Means NAA/NMHC are making the case that that addresses how partnerships can Committee has indicated it will be Congress never intended a 40-year push out tax adjustments through holding hearings regarding tax extenders, depreciation period for existing buildings multiple tiers of partners following an PHONE: 317-769-PAVE including energy provisions. Meanwhile, that wish to retain a full deduction for audit. Under those regulations, each the Trump Administration released a business interest. A 40-year depreciation partnership in a tier can elect to either TOLL FREE: 877-209-9871 Statement of Administration Policy that period would unnecessarily disrupt pay any tax adjustment at the entity said, “The Administration is concerned cash flows and increase tax liabilities, hascoinc.com level or push out that adjustment to its with future extensions of special interest reducing the ability of apartment owners own partners. tax deductions and benefits in the wake to invest in their assets or develop new of tax cuts and reforms that were enacted NAA/NMHC encouraged the IRS to allow properties. That result would be contrary in December 2017.” such treatment in an August 11, 2017, to the goal of the tax reform bill, and we letter to agency because multiple-tier are requesting that it be avoided. iaaonline.net JAN • FEB 2018 INSITES 31 contents 8 11 26 Cover illustration provided by Tikijian Associates, www.tamultihousing.com Members Buy Industry News Statewide News From Members 10 Updates from IAA members, including 22 Events and educational opportunities community service projects, legislative in Fort Wayne, Evansville, South Bend and 4 Win lunch for your office! Learn more progress, 40 Under 40 honors and more. more areas. about our Vic the Vendor campaign. From the IAA President IAA Board of Directors Education 14 Welcome to the new members serving 26 IAA offers multiple free sessions 6 The benefits and boons of being an IAA on the Board of Directors in 2018-2019. to members as well as a variety of member continue to grow. certification courses. 2017 Industry Summit From the IAA Chairman Legislative Update of the Board 16 Recap and discussion of trends in the multifamily world that affect properties 28 Progress and proceedings of the 2018 8 Be one of our dedicated volunteers and and members. short session continuing at the Indiana join an IAA committee. Statehouse. Membership Event Event 20 Welcome new members and learn 9 Power Lunch series continues April 26 more about the Enhanced Members who 29 Support and promote the industry’s with motivational speaker David Rendall support the association. maintenance staff through upcoming celebrations. Ad Directory ACI, Inc. 32 IAA Preferred Partners . .20 CORT Furniture . 15 IPL . .6 HASCO . .2 Jetz Service Co., Inc. 17 Hays + Sons . 8 Living the Dog LIfe . 13 HD Supply . 7 Ray’s Trash Service . .5 Holt Construction Group . 21 RentPath . 27 POSTMASTER: Send address changes to: Indiana Apartment Association, 9100 Keystone Crossing, Ste. 725, Indianapolis, IN 46240, Phone (317) 816-8900, Fax (317) 816-8911. Presorted standard at Indianapolis, IN. The views herein are those of the writers and advertisers and do not necessarily reflect those of the magazine’s management or ownership. IAA welcomes stories, art and photo contributions. All such material must be accompanied by a self-addressed, stamped envelope or it will not be returned. iaaonline.net JAN • FEB 2018 INSITES 3 Calendar Preview 9100 Keystone Crossing, Ste. 725 • Indianapolis, IN 46240 P: 317-816-8900 • F: 317-816-8911 • [email protected] www.iaaonline.net OFFICERS march Chairman Chad Greiwe, Gene B. Glick Company Vice Chairman National Apartment Leasing Professional (NALP) Cindy Koehler, Berkshire AHP 5-6 Treasurer certification continued Sandy Carmin, Englert Management Corporation Secretary Mark Juleen, J.C. Hart Company 7 Certified Apartment Manager (CAM) certification begins DIRECT BOARD MEMBERS 8 You Are Reputation Management Clarke Arnold, Birge & Held Asset Management, LLC Jerry Collins, Flaherty & Collins Properties Fair Housing for Maintenance – EVANSVILLE Randy Escue, Dominion Realty, Inc. 8 Mike Gorman, Edward Rose & Sons Jill M. Herron, Flaherty & Collins Properties Management Panel Discussion 9 Jon Hicks, In Good Company Michael Humphrey, AMP Residential, LLC EPA/CFC certification – SOUTH BEND Alexandra Jackiw, Milhaus Management, LLC 13 Steve Lavery, Herman & Kittle Properties, Inc. Kimberly Losacker, Pedcor Management Corporation CAM certification continues 14 Jim Murphy, CFC Properties Timothy J. Shafer, HI Management Company Maintenance Customer Service Scott Sladek, Buckingham Companies 15 George Tikijian, Tikijian Properties New Member/Employee Orientation Suzanne Thomson, Justus Companies, Inc. 15 Chuck Townsend, Sheehan Property Management, Inc. Mary Trujilo, Barrett & Stokely,