| ID | Status | Date | Public/Private | Industry | AHACPA Contact |
|---|---|---|---|---|---|
| #6873 | Closed | public | Multifamily | Les Sparks |
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One of my clients received the following document from HUD and notification that the residual receipts balances for their PRAC contracts that expired in November and December 2016 would be recaptured. As our clients have contracts that expire throughout 2017, I was wondering for what time period HUD has this authority. I’m assuming if there are PRAC contracts that expire within that time frame, a liability should be set up for this recapture if there are residual receipts balances. |
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From Les Sparks: Congress extended the authority to recapture the residual receipts balance last year in the annual appropriation bill. How long that authorization lasts is not clear. However, we are certain that this recapture will continue until the balances are drawn down. If I had a client with a PRAC with residual receipts amounts, I would reserve against the recapture by either removing it from the balance sheet as an asset or booking an allowance for recapture against it. Obviously, it has to stay on the residual receipts schedule, so an offsetting liability looks like the way to go. |