Issuers should report the issuance of BABs and RZEDBs on Form 8038-B, Information Return for Build America Bonds and Recovery Zone Economic Development BondsPDF. Notice 2009-26 – prior to the development of Form 8038-B, issuers were instructed to report the original issuance of BABs and RZEDBs on Form 8038-G, Information Return for Tax-Exempt Governmental Obligations. Notice 2010-35 – instructions for reporting the original issuance of both qualified tax credit bonds and STCBs on Form 8038-TC, Information Return for Tax Credit Bonds and Specified Tax Credit Bonds. How is the yield calculated for BABs (Direct Pay), for RZEDBs and for STCBs? Issuers should calculate the yield on BABs (Direct Pay), RZEDBs and STCBs for purposes of the arbitrage rules of section 148 of the Code and the regulations thereunder by reducing the amount of interest paid on the bond by the credit allowed under section 6431. (The amount of the refundable credit received may be less than the amount allowed due to sequestration and/or Federal and other liability offsets.) If tax-exempt bonds and tax credit bonds or STCBs or BABs are issued to finance the same project, on what form or forms are these bonds to be reported? The tax-exempt bonds should be reported on Form 8038-G or Form 8038-GC, as appropriate, the BABs should be reported on Form 8038-B and the qualified tax credit bonds and STCBs should be reported on Form 8038-TC. If both BABS and RZEDBs are issued to finance capital expenditures for a single project, what form or forms should be filed to meet section 149(e) reporting requirements? A separate Form 8038-B must be filed for BABs (Tax Credit), BABs (Direct Pay), and RZEDBs. If an issue of BABs, RZEDBs or STCBs contains both fixed rate bonds and variable rate bonds, must they be filed on a separate Form 8038-B or Form 8038-TC? No. When completing Form 8038-B, the issuer should follow the provisions of section 5.2 of Notice 2009-26 and the instructions to Form 8038-B. When completing Form 8038-TC, the issuer should follow the provisions of section 5 of Notice 2010-35 and the instructions to Form 8038-TC. Both the fixed rate and variable rate bonds must be reported together on Form 8038-B or Form 8038-TC. The issuer must attach separate, clearly labeled debt service schedules for the fixed rate bonds and the variable rate bonds. What is the time frame for filing Form 8038-B or Form 8038-TC? To meet the reporting requirements of section 149(e), Form 8038-B or Form 8038-TC must be filed on or before the 15th day of the second calendar month after the close of the calendar quarter in which the issue is issued. What are the "sale proceeds" required to be reported under "Use of Proceeds of Issue" on Form 8038-B and on Form 8038-TC? Sale proceeds are defined on Page 1 of each of the instructions to Form 8038-B and Form 8038-TC and in section 1.148-1(b) of the Treasury Regulations. For qualified tax credit bonds and STCBs section 54A requires, among other things, that 100% of available project proceeds be spent for one or more qualified purposes. The definition of available project proceeds in section 54A means sale proceeds of such issue (less not more than 2% of such proceeds used to pay issuance costs) plus investment proceeds thereon. If a credit is stripped at issuance, sale proceeds must include sale proceeds of the principal and sale proceeds of the credit strips. For BABs (Direct Pay) section 54AA requires, among other things, that 100 percent of the excess of available project proceeds, defined in section 54A to mean sale proceeds of such issue, (less not more than 2 percent of such proceeds used to pay issuance costs) plus investment proceeds thereon, over the amounts in a reasonably required reserve are to be used for capital expenditures. Are the irrevocable elections required by sections 54AA(d)(1)(C), and 54AA(g)(2)(B) or 6431(f)(3)(b) of the Code required to be submitted with Form 8038-B or Form 8038-TC respectively? No. Section 4 of Notice 2009-26 relating to the elections required by sections 54AA(d) and (g) and section 4 of Notice 2010-35 relating to the election required by section 6431(f)(3)(b) provide that the elections are to be made on the issuer's books and records on or before the issue date of the bonds. Each election may be evidenced using any reasonable method that establishes that the irrevocable election was made in a timely manner by the issuer. The format of such election is not prescribed and inclusion with any return is not required.