Pcmh 500 Gates Housing Development Fund Corporation

FORM 990-EZ, LINE J:

“Election pursuant to internal revenue code section 168(h)(6)(f) election to be treated as a taxable entity reference is made to pcmh gates, l.p., a new york limited partnership (the "partnership"), of which pcmh gates gp, inc., a new york corporation (the "general partner") is the general partner, bfim special limited partner, inc., a florida corporation (the "special limited partner") and bfim gates avenue, llc, a delaware limited liability company (the "investor partner"). Pcmh 500 gates housing development fund corporation, a new york not-for-profit corporation (the "exempt organization") owns 100% of the issued and outstanding shares of the general partner. We are the accountants for the general partner and the exempt organization. Section 168(h) of the internal revenue code of 1986, as amended (the "code") provides that where a "tax-exempt controlled entity" is a partner in a partnership, and the allocation of certain tax items to that partner is not a "qualified allocation" (as that term is defined in section 168(h)(6)(b) of the code), then a "proportionate share" of the partnership's property, equal to that partner's highest share in the partnership's income or gain of the partnership, is considered "tax-exempt use property and must be depreciated using the alternative depreciation system" provided by section 168(g) of the code. However, no portion of the partnership's property will be treated as tax-exempt use property and depreciated using the alternative depreciation system if the tax-exempt controlled entity makes an election (the "section 168(h)(6) election") under section 168(h)(6)(f)(ii) to not be treated as a tax-exempt entity for purposes of sections 168(h)(5) and (6) of the code. We understand that it is material to the limited partner that the partnership's property not be depreciated using the alternative depreciation system, and that the limited partner are making their investment in reliance upon the covenant of the general partner and the exempt organizations to assure that a proper and timely section 168(h)(6) election is made. As the accountants for the general partner and the exempt organization, we acknowledge that the general partner and limited partner intend that the section 168(h)(6) election be made on a timely basis. We understand that: 1. The section 168(h)(6) election must be made by the due date (including extensions) of the tax return for the first tax year that the election applies. We expect this due date (before extensions) to be march 15, 2019, which is march 15 for the year following the year in which all or any portion of the partnership's housing project is placed in service. Notwithstanding the foregoing, the general partner is required to make the section 168(h)(6) election as a condition to payment of the seventh installment of capital contributions by the investor limited partner. In order to satisfy this condition, the general partner will need to make the section 168(h)(6) election in conjunction with the filing of its 2018 tax return. 2. The section 168(h)(6) election must be attached to the general partner's tax return, with a copy attached to the tax return of the exempt organization. 3. The section 168(h)(6) election shall: a. Contain the name, address and taxpayer identification number of the general partner, b. Identify the election as a section 168(h)(6) election, c. State that the election applies to all of the general partner's property, and that the election applies to the taxable year that the partnership's property is placed in service and all subsequent years, d. State that the general partner is entitled to make the election because it is a tax-exempt controlled entity that is timely filing the election, and e. Include such other information and comply with such other requirements as may be determined by the internal revenue service or the united states treasury department.”