Yesterday, the IRS issued Revenue Procedure 2014-52 which provides for the reallocation of $2.59 million of unused national pool low-income housing tax credits (LIHTCs). The national pool credits were divided among thirty-five states and Puerto Rico, with California receiving the largest allocation of $364,756. Each year the Internal Revenue Service allocates a certain amount of LIHTCs to each state using a formula allocation method, which is based on a state’s population, and is established in Section 42 of the Internal Revenue Service Code. In addition to the credits allocated pursuant to this formula method, each year, states are also permitted to allocate LIHTCs that were returned (unused) to the state housing finance agency (HFA) by recipients of tax credits allocated in a prior year, and LIHTCs from the prior calendar year that were not previously allocated by the HFA. However, tax credits that are not allocated by a state HFA within 2 years must be returned by the state HFA to the IRS, which then places them in a national pool of unused tax credits. The IRS then reallocates these national pool credits to state HFAs that fully utilized their entire LIHTC allocation for the prior calendar year.