Financial institutions organized as C corporations can reduce federal and state tax liabilities and permanently lower their tax burdens by purchasing tax credits—without participating in the activity related to the credit.
Determining which credits to purchase, however, depends on the nuances of financial institutions’ circumstances and how the corporation pays taxes.
Our professionals can help your organization:
- Source federal and state tax credits
- Assess key considerations when investing in federal and state tax credits
- Assist with federal income tax credit syndicator selection
- Review additional nonfinancial motivations for investing such as Community Reinvestment Act (CRA); public welfare initiative (PWI); or environmental, social, and governance (ESG) initiatives
- Determine types of tax credit investments and the risks
- Calculate the after-tax yield—internal rate of return (IRR), return on investment (ROI), or other preferred metric—of the credit