Instructions For Form It-252 - Investment Tax Credit For The Financial Services Industry - New York State Department Of Taxation And Finance - 2002 Page 2
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Page 2 of 4 IT-252-
(2002)
Investment credit base
Early disposition of property and addback of credit on
The investment tax credit is figured on the investment credit base.
early dispositions
The investment credit base is the cost or other basis of the qualified
property for federal income tax purposes. Do not include any amount that
If property on which the investment credit was taken is disposed of or
was expensed under section 179(a) of the IRC. The basis of qualified
removed from qualified use before its useful life or specified holding period
property must include the remaining basis of other property exchanged or
ends (see instructions for Part V), the difference between the credit taken
traded in for it. If a credit was previously allowed on the property exchanged
and the credit allowed for actual use must be added to your income tax in
or traded in, a disposition of property has occurred, and you may have to
the year of disposition. You must also add to your income tax an additional
figure an addback of credit on early dispositions (see Part V instructions).
amount computed by multiplying the addback of credit on early dispositions
by the underpayment interest rate in effect on the last day of your tax year.
If qualified property is acquired to replace insured property that was stolen
The underpayment interest rate is not compounded. However, if the
or destroyed by fire, storm, shipwreck, or other casualty, the basis of the
property was in qualified use for more than 12 consecutive years, the
replacement property is its cost reduced by any amount of gain not
addbacks for credit and interest on early dispositions are not required.
recognized for federal income tax purposes because the insurance
proceeds were invested in the replacement property.
Disposition of property also includes:
— a sale of property;
Investment credit base for replacement property that is similar or
related in service or use to property destroyed as a direct result of the
— the contribution of property to a partnership or corporation, unless a
terrorist attacks of September 11, 2001 — If replacement property is
substantial interest in the ownership of the trade or business is retained
acquired that is similar or related in service or use to the property
by the transferor;
destroyed as a direct result of the terrorist attacks of September 11, 2001,
— the sale by a partner of his or her interest in a partnership;
and you chose not to defer the required amount to be recaptured, the
— a gift of property;
investment credit base of the replacement property is computed without
regard to any basis reduction required by IRC section 1033. For more
— a reduction in the proportionate stock interest of an electing New York
information, see TSB-M-02(7)I.
S corporation shareholder;
— conversion of property to personal use;
If the qualified property is purchased using nonqualified nonrecourse
financing, the investment credit base must be reduced by the amount of
— a change in the location of the property to a situs outside New York
financing that would be excludable from the credit base pursuant to
State;
section 49(a)(1) of the IRC. If, at the close of a tax year following the tax
— an exchange of property for other property of like kind (including a
year in which the property was placed in service, there is a net decrease in
trade-in of property);
the amount of nonqualified nonrecourse financing with respect to the
— the theft or destruction of property; and
property, the net decrease is to be treated as the cost or other basis of
qualified property acquired, constructed, reconstructed, or erected during
— an increase in nonqualified nonrecourse financing (but the addback of
the year of the decrease.
credit only applies for the portion of such increase).
Ordinarily, transfers by reason of death are not dispositions of property.
Carryover of unused investment credit
If you cannot claim all of your 2002 credit because it is more than your
Early disposition of property and addback of credit on early
New York State tax less other credits, you can carry over the unused
dispositions as a direct result of the terrorist attacks of September 11,
amount to the following ten years, or, if you are the owner of a new
2001 — If you chose to defer the amount to be recaptured on last year’s
business, you may qualify for a refund (see Refundable unused investment
return due to the terrorist attacks of September 11, 2001, the recapture
tax credit below).
amount must be augmented with interest computed at a rate equal to two
times the underpayment interest rate in effect on the last day of the tax
Refundable unused investment tax credit
year in which the recapture occurs. However, a taxpayer making this
If you are a sole proprietor or a partner in a new business, you can claim a
election that meets the employment test (Worksheet A) is not required to
refund of your unused credit instead of carrying over the unused amount to
recapture any investment tax credit with respect to the qualifying property.
next year.
In addition, if 50% or more of an electing taxpayer’s employees died as a
direct result of the terrorist attacks, the employer is not required to
You can only make this election in the first five years that you operate your
recapture any investment tax credit with respect to the qualifying property.
new business.
For more information, see TSB-M-02(7)I.
You cannot claim a refund of unused credit if:
Worksheet A
(see instructions on page 3)
— You have operated your new business in New York State for more than
five years, excluding short years of the business, or
A
B
C
D
E
F
— Your new business is substantially similar in operation and ownership to
Year
March 31
June 30
Sept. 30*
Dec. 31**
Total
(B+C+D+E)
a business that:
1. Total
1. is (or was) subject to any of the following taxes:
employment
number in NYS
• franchise tax on transportation and transmission corporations
for the second
and associations;
year preceding
the recapture
• additional franchise tax on transportation and transmission
event tax year.
corporations and associations;
Year
• franchise tax on farmers, fruit growers, and other like agricultural
2. Total
corporations organized and operated on a cooperative basis;
employment
number in NYS
• franchise tax on water-works companies, gas companies,
for the year
electric or steam heating, lighting, and power companies;
immediately
preceding the
• franchise tax on business corporations;
recapture event
tax year.
• franchise tax on banking corporations; or
Year
• franchise tax on insurance corporations;
3. Total
2. would have been subject to the New York State unincorporated
employment
business tax (as such tax was in effect on January 1, 1980); or
number in NYS
for the recapture
event tax year.
3. had income or losses that are (or were) included in computing your
New York State personal income tax.
Year
1 2 3 4 5 6 7 8 9 0 1 2 3 4 5 6 7 8 9 0 1 2 3 4 5 6 7 8 9 0 1 2 1 2 3 4 5 6 7 8 9 0 1 2 3 4 5 6 7 8 9
1 2 3 4 5 6 7 8 9 0 1 2 3 4 5 6 7 8 9 0 1 2 3 4 5 6 7 8 9 0 1 2 1 2 3 4 5 6 7 8 9 0 1 2 3 4 5 6 7 8 9
4. Three-year
1 2 3 4 5 6 7 8 9 0 1 2 3 4 5 6 7 8 9 0 1 2 3 4 5 6 7 8 9 0 1 2 1 2 3 4 5 6 7 8 9 0 1 2 3 4 5 6 7 8 9
1 2 3 4 5 6 7 8 9 0 1 2 3 4 5 6 7 8 9 0 1 2 3 4 5 6 7 8 9 0 1 2 1 2 3 4 5 6 7 8 9 0 1 2 3 4 5 6 7 8 9
If you are a shareholder of an S corporation that has an election in effect
total (the total of
1 2 3 4 5 6 7 8 9 0 1 2 3 4 5 6 7 8 9 0 1 2 3 4 5 6 7 8 9 0 1 2 1 2 3 4 5 6 7 8 9 0 1 2 3 4 5 6 7 8 9
1 2 3 4 5 6 7 8 9 0 1 2 3 4 5 6 7 8 9 0 1 2 3 4 5 6 7 8 9 0 1 2 1 2 3 4 5 6 7 8 9 0 1 2 3 4 5 6 7 8 9
under section 660 of the Tax Law, and the S corporation qualifies as a new
column F).
1 2 3 4 5 6 7 8 9 0 1 2 3 4 5 6 7 8 9 0 1 2 3 4 5 6 7 8 9 0 1 2 1 2 3 4 5 6 7 8 9 0 1 2 3 4 5 6 7 8 9
1 2 3 4 5 6 7 8 9 0 1 2 3 4 5 6 7 8 9 0 1 2 3 4 5 6 7 8 9 0 1 2 1 2 3 4 5 6 7 8 9 0 1 2 3 4 5 6 7 8 9
1 2 3 4 5 6 7 8 9 0 1 2 3 4 5 6 7 8 9 0 1 2 3 4 5 6 7 8 9 0 1 2 1 2 3 4 5 6 7 8 9 0 1 2 3 4 5 6 7 8 9
business as defined in section 210.12(j) of the Tax Law, you may qualify to
1 2 3 4 5 6 7 8 9 0 1 2 3 4 5 6 7 8 9 0 1 2 3 4 5 6 7 8 9 0 1 2 1 2 3 4 5 6 7 8 9 0 1 2 3 4 5 6 7 8 9
1 2 3 4 5 6 7 8 9 0 1 2 3 4 5 6 7 8 9 0 1 2 3 4 5 6 7 8 9 0 1 2 1 2 3 4 5 6 7 8 9 0 1 2 3 4 5 6 7 8 9
1 2 3 4 5 6 7 8 9 0 1 2 3 4 5 6 7 8 9 0 1 2 3 4 5 6 7 8 9 0 1 2 1 2 3 4 5 6 7 8 9 0 1 2 3 4 5 6 7 8 9
have the excess credit that relates to your pro rata share of the
corporation’s credit refunded.
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