Is my basis in a partnership (llc) affected by federal and state historic tax credits? The partnership owns an historic structure. I would imagine that they would reduce my basis but is it reduced by the amount of Federal and State credits or just Federal tax credits for federal return and state credits for state return?

“Is my basis in a partnership (llc) affected by federal and state historic tax credits?”---->Yes; federal and state historic tax credits maybe used to cut your income tax liability.
“The partnership owns an historic structure. I would imagine that they would reduce my basis but is it reduced by the amount of Federal and State credits or just Federal tax credits for federal return and state credits for state return?”----> Taxpayers must reduce their basis by the amount of the rehab credit. This keeps them from taking depreciation deductions on the portion of the cost of the building takes as a tax credit. For example, assume that the original basis of the historic structure that the P/S owns is $50,000 and you spend $60,000 to restore the structure. Then $60,000( as $60,000>$50,000, original cost or $60,000>$5,000), your credit for rehabilitation expenditures equals $12,00($60,000*20% mandatorily given by the IRS). So, your basis in the structure increase by $48,000;$60,000-$12,000=$48,000 to $98,000($50,000+$48,000)=$98,000.

Thank you for your response, one clarification is still needed though. If I get 20% from the Fed, and 20% from the state my total basis is reduced by the amounts of Both credits and not just the Federal, right?

Correct. Though this is a federal program.( you can get your federal and(or) state income tax credit); as long as the amount doesn't exceed $12,000 as in the example.Unused tax credit can be carried backone year and carried forward up to 20 years.

Thanks again.