Can your system handle the complexities of the new amortization method?
Low-income housing projects have always yielded substantial tax benefits for investors. The Low-Income Housing Tax Credit (LIHTC) provides an incentive to invest in the construction or rehabilitation of low-income housing projects.
Qualified investors can receive lucrative credits over a 10-year period. However, recent changes have been made to the way initial investment and costs of such projects are amortized over the life of the investment.
The Financial Accounting Standards Board (FASB) recently issued guidance that allows investors to amortize the cost of these investments in proportion to these tax credits. Since the amount of such credits can change from year to year, tracking and amortizing now pose a challenge for accountants.
Typical accounting systems do not address LIHTC calculations and rules without the need for considerable customization. As a result, companies turn to spreadsheets; however, on their own, spreadsheets cannot handle the requirements of the new amortization method or track individual investments costs and tax credits in an effective manner.
The unmatched benefits of using Vena for LIHTC amortization calculations
Vena automatically tracks and manages your investments and LIHTC proportional amortization calculations. Vena streamlines the proportional amortization process with a single solution that leverages native Excel, in addition to a state-of-the-art database and process manager.
Vena automatically collects data from each investment K-1 statement and projected user inputs before summarizing them to expediently calculate LIHTC proportional amortization. You and your team can leverge Vena's sophisticated analytic tools to quickly create insightful reports for management.
Vena takes the manual work out of calculations and reports
The benefits of using Vena for proportional amortization calculations go beyond the computation of monthly and annual amortization.
With Vena, you can also:
- Collect investment and cost data for each property
- Create key reports for each investment, including tracking of tax credits, amortization for each fiscal period, internal rate of return calculations and detailed investment and cost data
- Create and maintain a “single version of the truth” for each of your low-income housing investments
- Perform trend analysis to see how contributions, tax credits, IRR and other measures for all investments change over its lifespan
- Perform what-if modeling to see how your total portfolio changes with new investments
- Utilize a sophisticated workflow engine to tracks the review and approval of all inputs and changes
- Analyze key metrics across all investments
- Receive automatically generated emails about upcoming tasks and due dates
Harness the power of Excel coupled with a secure, centralized database
Vena lets you use the familiar Excel interface in your LIHTC amortization process - allowing for quick ramp ups and fast implementations. Vena:
- Connects your data and templates to a central, secure, in-memory database
- Leverages a flexible workflow engine and robust audit trail to ensure proper controls and approvals are in place
- Leverages Excel’s powerful formulas to calculate amortization, tax credits, net cash flow and investment metrics such as IRR, MIRR and NPV. That’s how Vena works – it utilizes what you are already familiar with, automating your LIHTC proportional amortization calculations and processes within a single, unified solution that can be used throughout your entire organization
- Save time ad money, increase productivity and reduce the risk of error. This will give you and your team more time to analyze data and quickly get the necessary reports into the hands of those who need them most