Available Construction Proceeds

Section 148(f)(4)(C)(vi) of the Code defines “Available Construction Proceeds” as the amount equal to the Issue Price (within the meaning of section 1273 and 1274) of the Construction Issue, increased by earnings on the issue price, earnings on amounts in any reasonably required reserve or replacement fund not funded from the issue, and earnings on all of the foregoing earnings, and reduced by the amount of the issue price in any reasonably required reserve or replacement fund and the issuance costs financed by the issue.

This means, the calculation includes earnings on the portion of the proceeds deposited to the 4-R fund (because those proceeds are part of the “Issue Price”)  even though such proceeds are not in the actual construction fund.

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