26 CFR §1.42-0

1. (a)Average income set-aside.
2. (b)Definition of low-income unit and qualified group of units.
   1. (1)Definition of low-income unit.
   2. (2)Definition of qualified group of units.
   3. (3)Identification of qualified groups of units.
      1. (i)Average income set-aside test.
      2. (ii)Applicable fraction determinations.
      3. (iii)Identification of units.
3. (c)Procedures.
   1. (1)Identification of low-income units for use in the average income set-aside test or the applicable fraction determination.
      1. (i)In general.
      2. (ii)Recording and communicating.
   2. (2)Notifications to the Agency with jurisdiction over a project.
      1. (i)Agency flexibility.
      2. (ii)Examples.
   3. (3)Designation of imputed income limitations.
      1. (i)Timing of designation.
      2. (ii)10-percent increments.
      3. (iii)Continuity.
      4. (iv)Recording, retention, and annual communications related to designations.
   4. (4)Correcting failures to comply with procedural requirements.
      1. (i)In general.
      2. (ii)Discovery by taxpayer.
      3. (iii)Discovery by Agency.
      4. (iv)Waiver by Agency.
4. (d)Changing a unit's designated imputed income limitation.
   1. (1)Permitted changes.
      1. (i)Federally permitted changes.
      2. (ii)Housing credit agency (Agency)-permitted changes.
      3. (iii)Certain laws.
      4. (iv)Tenant movement.
      5. (v)Restoring compliance with average income requirements.
   2. (2)Process for changing a unit's designated imputed income limitation.
5. (e)Examples.
6. (f)Applicability dates.
   1. (1)General rule.
   2. (2)Designations of occupied units.
   3. (3)Applicability of this section to taxable years beginning before January 1, 2023.
   4. (4)Taxable years beginning on or after September 30, 2025.