What relationship exists between the substantially rehabilitated requirement and the placed in service requirement?

If the substantial rehabilitation test has not been met at the time a building, or some portion of the building is actually placed in service, the building does not meet the definition of a qualified rehabilitated building. As such, placed in service is deemed to be at the point in time when the substantial rehabilitation test is actually met. See Internal Revenue Code Section 47(b)(1) and 47(c)(1)(C) and Treasury Regulation 1.48-12(f)(2) and 1.48-12(c)(6) for additional information.

Generally speaking, the 24-month measuring period ends sometime during the year in which the property is placed in service.