Community Agriculture Alliance: Barns deserve credits
January 19, 2017
Barns have long captured the imagination of the American public. They are prominent icons on the landscape and reminders of the nation’s agrarian roots and hardy pioneers.
Unfortunately, as the economy and agricultural practices have changed, many venerable barns have collapsed or disappeared. Scores of Routt County barns remain only as memories or faded photographs. On the other hand, there are also inspiring local examples of rehabilitated barns that are again being used for agriculture and dairy operations, as well as educational facilities and residences.
Rehabilitated barns deserve credits. There are several non-traditional financial incentives for property owners who wish to rehabilitate their historic structures, including barns. These incentives are not grants, which can be challenging to acquire and manage, but instead, federal and Colorado State historic preservation tax credits. Tax credits reduce one’s tax liability directly, dollar for dollar.
The most straightforward and easily applied for incentive is the 10 percent Federal Investment Credit for income-producing properties built before 1936. Barns, agricultural buildings and commercial buildings are all eligible. The property cannot be listed on the National Register, which would trigger a different set of requirements. Rehabilitation expenses must be $5,000 or more in a 24-month period, and depreciation must be allowable. See the instructions for IRS Form 3468 or visit your tax preparer for more information.
The 20 percent Federal Investment Credit is more generous but also more rigorous. In this case, the barn (or any income-producing building) must be listed on the National Register or identified as eligible for listing on the National Register. The rehabilitation work must be reviewed by the National Park Service (through History Colorado) and must meet the Secretary of the Interior’s Standards for Rehabilitation. Again, IRS Form 3468 provides further information.
What are the Secretary of the Interior’s Standards for Rehabilitation? In a nutshell, they are a set of 10 commonsense recommendations created by the National Park Service to help owners rehabilitate a historic property in a manner that maintains its historic character. And what is rehabilitation? The official definition is long, but informative. It is the process of returning a property to a more useful state through repair or alteration for an efficient contemporary use, while preserving those portions of the property which are significant to its historic, architectural and cultural values.
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Understanding that, the state of Colorado provides 20 or 25 percent (depending on the choice of credit) Historic Preservation Tax Credits for rehabilitation work that meets the Secretary of Interior’s Standards for Rehabilitation.
Credits are available for commercial (including barns and ranches) and residential properties listed on a historic register. Rural properties— and properties in Oak Creek, Yampa and Hayden — must be listed on either the State or National Historic Register.
Properties in Steamboat Springs need only be listed on the Steamboat Springs historic register to be eligible. Properties listed on the National Register are eligible to pair Colorado State Tax Credits with the 20 percent Federal Investment Credit. Contact h-co.org/statetaxcredit or your tax preparer for further details.
Indeed, barns and other historic buildings in need of rehabilitation deserve credits.
For more information, visit historycolorado.org/oahp/preservation-tax-credits.
Arianthé C. Stettner, MBA, MAHP, is a member of the Historic Routt County Advisory Board.