Tax Credit Investor Yield Calculator

LIHTC investor underwrites combined credits + losses + capital recapture for after-tax IRR target.

Total equity invested

Annual credit amount

Credit years

Annual loss deduction

Marginal tax rate %

Total after-tax benefit

$10,630,000

Total credits

$10,000,000

Loss deduction benefit

$630,000

How the math works

Credits + (losses × tax rate × years) = total after-tax benefit.

$1M × 10 = $10M credits + ($300k × 10 × 21%) = $630k = $10.63M total benefit on $8.5M equity.

How to Use

Enter total equity invested.
Enter annual credit amount.
Enter credit years.
Enter annual loss deduction.
Enter marginal tax rate %.
Read total after-tax benefit.

Frequently Asked Questions

LIHTC investor IRR target?

Net after-tax IRR target: 4–7% historically, currently 7–10% post-rate environment. Streams: 10-year credits, accelerated depreciation losses (drives down income tax), capital event at year 15 exit. Pricing: $0.85–0.95 per $1 of credit historically, $0.78–0.88 in 2024 reflecting tighter spreads. Investor pool: large banks (CRA driven), insurance companies, some corporates. Tax structure: investor enters as limited partner of operating partnership. Year 15 exit: many investors sell back to GP for nominal.

How does this asset class compare to traditional CRE?

Specialty assets (self-storage, RV parks, MHP, marinas, cold storage, data centers, parking, car wash, QSR/c-store, billboards, cell towers) typically offer higher cap rates than office/retail but with more operational complexity. They reward specialized operators with deep market knowledge. Lender pool is narrower, capital costs sometimes 50–150 bps higher, but downside resilience often better.

Capex and operational considerations?

Specialty assets often have heavier operational burden than passive triple-net retail. Self-storage, RV, MHP: tenant turn, security, basic upkeep. Marinas, parking, car wash: equipment-heavy with replacement reserves. Cold storage, data center: utilities are major cost. Billboards, cell towers: minimal opex, near-passive. Match management capacity to asset operational intensity.

Exit strategy?

Specialty asset cap rates have compressed significantly over last cycle but volatility is real. Buyers: REITs, private equity rollups, regional operators, 1031 buyers. Strong NOI history, environmental clarity (especially for car wash, gas station), and lease structure (for billboards, cell towers) drive valuation. Plan exit 24+ months in advance for best execution.