What type of entity qualifies as a CDE?
A CDE is any domestic corporation or partnership for Federal tax purposes: That has a primary mission serving or providing investment capital for low-income communities or low-income persons. Maintains accountability to residents of low-income communities through their representation on any governing board or on any advisory board of the CDE. Is certified by the Treasury Department as an eligible CDE. In allocating the credits, the Treasury Department will give priority to entities with records of having successfully provided capital or technical assistance to disadvantaged businesses or communities, as well as to entities that intend to invest substantially all of the proceeds from their investors in businesses in which persons unrelated to the CDE hold the majority of the equity interest. A “small business investment company” (as defined in the tax laws) and a “community development financial institution” (as defined in Federal banking laws) are treated as meeting these requirements.
