Instructions For Form 6765 - Credit For Increasing Research Activities

•

For the 6th tax year beginning after 1993 for which you

Section A—Regular Credit

have qualified research expenses, divide the aggregate

Skip this section and go to Section B if you are electing

qualified research expenses for the 4th and 5th such tax

or previously elected the alternative incremental credit

years by the aggregate gross receipts for those tax

(and have not requested and received permission to

years, and multiply the result by 0.1667.

revoke the election).

•

For the 7th tax year beginning after 1993 for which you

Line 1

have qualified research expenses, divide the aggregate

qualified research expenses for the 5th and 6th such tax

Corporations (other than S corporations, personal holding

years by the aggregate gross receipts for those tax

companies, and service organizations) may be eligible for

years, and multiply the result by 0.3333.

a “basic research” credit if payments in cash to a

•

For the 8th tax year beginning after 1993 for which you

qualified university or scientific research organization

have qualified research expenses, divide the aggregate

(under a written contract) exceed a base period amount

qualified research expenses for the 5th, 6th, and 7th such

(based on their general university giving and certain other

tax years by the aggregate gross receipts for those tax

maintenance-of-effort levels for the 3 preceding years).

years, and multiply the result by 0.5.

Enter your payments on this line. See section 41(e) for

Note: See section 41(c)(3)(B)(ii) to figure the fixed-base

details.

percentage for any tax year after the 8th tax year

Line 2

beginning after 1993 for which you have qualified

Enter the qualified organization base period amount as

research expenses.

defined in section 41(e). The amount on line 2 (not to

The fixed-base percentage for an existing company

exceed the amount on line 1), although not eligible for the

(any company that is not a start-up company) is figured

basic research credit, can be treated as contract

by dividing the aggregate qualified research expenses for

research expenses on line 7 subject to the 65% (or 75%)

the tax years beginning after 1983 and before 1989 by

limitation.

the aggregate gross receipts for those tax years.

Line 6

The fixed-base percentage for all companies (existing

and start-up) must be rounded to the nearest 1/100th of

Enter the amount you paid or incurred for the rental or

lease of computers used in qualified research. The

1% (i.e., four decimal places) and cannot exceed 16%. In

computer must be located off your premises and you

addition, when figuring your fixed-base percentage, you

must not be the operator or primary user of the computer.

must reflect expenses for qualified research conducted in

Puerto Rico or a U.S. possession for the prior tax years

Reduce this amount by the amount that you (or any

included in the computation.

member of a controlled group of corporations or

businesses under common control) received or accrued

If short tax years are involved, see section 41(f)(4).

for the right to use substantially identical property.

Note: Reduce gross receipts by returns and allowances.

For a foreign corporation, include only gross receipts that

Line 7

are effectively connected with a trade or business in the

Include 65% of any amount you paid or incurred for

United States (or in Puerto Rico or a U.S. possession, if

qualified research performed on your behalf. Prepaid

applicable).

contract research expenses are considered paid in the

year the research is actually done. Also include 65% of

Line 10

that portion of the line 1 basic research payments that

Enter the average annual gross receipts (reduced by

does not exceed the line 2 base amount.

returns and allowances) for the 4 tax years preceding the

However, use 75% in place of 65% for payments

tax year for which the credit is being determined. You

made to a qualified research consortium. A qualified

may be required to annualize gross receipts for any short

research consortium is a tax-exempt organization

tax year. For a foreign corporation, include only gross

described in section 501(c)(3) or 501(c)(6) that is

receipts that are effectively connected with a trade or

organized and operated primarily to conduct scientific

business in the United States (or in Puerto Rico or a U.S.

research and is not a private foundation.

possession, if applicable).

Line 9

Line 16

The fixed-base percentage depends on whether you are

If you do not elect the reduced credit, you must reduce

an existing company or a start-up company.

your otherwise allowable deduction for qualified research

expenses or basic research expenses by the amount of

A start-up company is a taxpayer that had both gross

the credit on this line. If the credit exceeds the amount

receipts and qualified research expenses either:

•

allowed as a deduction for the tax year, reduce the

For the first time in a tax year beginning after 1983 or

•

amount chargeable to the capital account for the year for

For fewer than 3 tax years beginning after 1983 and

such expenses by the amount of the excess.

before 1989.

The fixed-base percentage for a start-up company is

Attach a schedule to your tax return that lists the

figured as follows.

deduction amounts (or capitalized expenses) that were

•

For the first 5 tax years beginning after 1993 for which

reduced. Identify the lines of your return (schedule or

you have qualified research expenses, the percentage is

forms for capitalized items) on which the reductions were

3%.

made.

-2-

Instructions For Form 6765 - Credit For Increasing Research Activities - 2001 Page 2

Related Articles

Related forms

Related Categories