Form Mine-Cred - Mineral And Coal Exploration Incentive Credit - 2016 Page 3
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4Form MINE-CRED Instructions
Definitions
Your portion of the credit that your S corporation or
partnership passes through to you is based on the same
“Certified expenditures” refers to those costs incurred for
proportion you use to report your income and loss for
activities in direct support of exploration activity conducted
Montana tax purposes.
at a specific exploration site for the purpose of determining
the existence, location, extent or quality of a mineral or coal
When your S corporation or partnership passes through
deposit.
a credit, remember to enter the entity’s name, federal
employer identification number and your portion of the
“Geochemical methods” refers to geochemical data
credit in the space provided.
gathering methods, including the collection and chemical
analyses of soil, rock, water, air, vegetation and similar
Can I carry any excess mineral and coal exploration
samples.
incentive credit back to a prior year or forward to a
subsequent year?
“Geophysical methods” includes all geophysical data
gathering methods used in mineral or coal exploration,
This credit may be carried forward 15 years.
including seismic, gravity, magnetic, radiometric, radar, and
What information do I have to include with my return
electromagnetic and other remote sensing measurements.
when I claim this credit?
“Mineral” refers to those substances defined as minerals
If you file your Montana tax return electronically, you do not
by Section 82-4-303, Montana Code Annotated (MCA) and
need to mail this form to us unless we ask you for a copy.
coal defined by Section 82-1-111, MCA.
When you file electronically, you represent that you have
“Mining operation” includes all operating and nonoperating
retained the required documents in your tax records and
activities related to a mineral deposit interest, which may be
will provide them upon the department’s request.
composed of one or more mining properties.
If you file your Montana individual income tax return or
“Person” means a sole proprietorship, corporation,
corporate income tax return on paper, include copies of
partnership, small business corporation as defined in
Forms MINE-CRED and MINE-CERT (showing certified
Section 15-30-3301, MCA, or limited liability company as
expenditures). A separate Form MINE-CERT needs to be
defined in Section 35-8-102, MCA.
completed for each entity with a distinct mining operation.
Who can claim this credit?
If you file your Montana partnership return, Form PR-1,
or your Montana S corporation return, Form CLT-4S, on
A person may claim this credit for the certified expenditures
paper, include copies of Forms MINE-CRED and MINE-
of the following activities that are performed on land in
CERT (showing certified expenditures) and a supplemental
Montana to determine the existence, location, extent, or
schedule identifying each partner or shareholder and their
quality of a mineral or coal deposit, regardless of who owns
portion of the credit.
the land:
What limitations apply to this credit?
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Surveying by geophysical or geochemical methods;
The credit earned each year is limited to 50% of the
•
Drilling exploration holes;
certified expenditures for that year and may not exceed a
•
Conducting underground exploration;
total of $20 million for all years. The credit used each year
is limited to 50% of that year’s tax liability.
•
Surface trenching and bulk sampling; or
•
Performing other exploratory work, including aerial
Part I. Partners in a Partnership or Shareholders of an
photographs, geological and geophysical logging,
S Corporation
sample analysis, and metallurgical testing.
If you received this credit from a partnership or S
A person must apply for the certification of expenditures
corporation, you will need to fill out Part I in its entirety.
incurred by submitting Form MINE-CERT to the department
Your portion of the credit can be obtained from the Montana
within 60 days after the close of the calendar year. The
Schedule K-1 that you received from the entity. In addition
department will make a determination of the certification
to reporting your portion of the credit, you will need to
by September 30. Please see Form MINE-CERT and
provide the partnership’s or S corporation’s name and
its instructions for more information on the application
Federal Employer Identification Number. You will also need
process. This form is available on our website at revenue.
to complete Part IV. You will not complete Parts II, III, V or
mt.gov.
VI.
How do I claim this credit when I am a partner or
Part II. Mineral and Coal Exploration Incentive Credit
shareholder in a partnership or S corporation?
Calculation
When the expenditures of a partnership or S corporation
Only sole proprietorships and C corporations should
are certified, the entity will report the credit on its
complete Part II.
information return and provide you with your portion of the
Each column must be completed for each distinct mining
credit.
operation. If necessary, use additional pages.
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