Instructions for PART A
SUBTRACTION FOR PRESERVATION OF HISTORIC PROPERTY
The subtraction for preservation of historic property has been repealed for taxable years beginning
after December 31, 1996. However, certified rehabilitation expenses made prior to January 1, 1997 may continue
to be amortized over a 60 month period.
Who May File
age (20%) must be prorated for the number of months in the
taxable year. Enter the prorated percentage in column 5.
A claim for a subtraction for rehabilitation of a historic struc-
Multiply the amount of the basis (column 2) by the percentage
ture or building may be made by those taxpayers who own a
and enter in column 6. Example: If the basis is acquired in
building or structure which is a certified historic structure that
July, the month in which amortization may begin is August.
has had certified rehabilitation. The intent of the legislation
Multiply 20% by the remaining months (5) and divide by twelve.
creating this subtraction is to allow a subtraction for rehabilita-
The result is 8.33%, which should be entered in this column.
tion of historic properties and not to provide tax relief for rou-
tine maintenance, alteration or stop-gap repairs that do not
correct the situation that has created the need for repair.
Certified rehabilitation is any rehabilitation of a structure
What Structures Qualify
for the purpose of stabilizing or restoring the structure. Sta-
bilization is the process of authentically preserving the struc-
A “Certified Historic Structure” means a building or struc-
ture in its present state and arresting further deterioration.
ture which is not used in a trade or business or held for the
Rehabilitation must be authentic and accurately preserve
production of income. It must be either listed in the National
and/or rehabilitate the structure in accordance with its ap-
Register of Historic Places; located in a Registered Historic
pearance at the period in history for which the structure is
District and certified as being of historic significance by the
U.S. Secretary of the Interior or the Maryland Historical Trust;
Certified rehabilitation includes but is not limited to inte-
designated by a certified local government as an individual
rior or exterior restoration, structural work and other neces-
historic site; located in a district designated by a certified lo-
sary improvements in wiring, plumbing and other utilities, pro-
cal government as an individual historic site; or located in a
vided such devices existed in the structure in the period for
district designated as historic by a certified local government
which it is historically significant.
and certified as being of historic significance in the district by
Landscaping expenses are not allowed unless they in-
the certified local government.
volve an historically accurate rehabilitation of a fully docu-
mented garden, garden walk or garden wall or when they
involve the correction of a drainage problem which is ad-
The amortization basis (column 2) represents the amount
versely affecting the building.
expended for certified rehabilitation costs only and does not
include the purchase price of the property. Expenditures aris-
How To File
ing from the regular and normal or scheduled maintenance
If you are completing this form for certification of expenses,
of the structure will not qualify for amortization. The date of
complete documentation form on page 4, mail the form and
basis (column 3) is the date payment was made for the
“before and after” photographs of the rehabilitated portions of
amount of the certified rehabilitation cost.
the structure to the Maryland Historical Trust, 100 Community
Place, Crownsville, Maryland 21032-2023. The Trust will re-
view your documentation and make its determination as to the
The basis shall be amortized over a period of 60 months.
allowable expenses and return the Form 502H to you with its
The 60 month period shall begin, at the election of the tax-
complete or conditional approval. The approved expenses
payer, with the month following the month in which the basis
may then be amortized on page 1.
is acquired, or with the succeeding taxable year.
If you do not receive the certified form before the due
date for filing your income tax return, you may use a copy of
Rate or %
the form. The expenses claimed will be subject to audit and
revision pending the completion of the certification by the
If the taxpayer elects to begin amortizing the basis in
Maryland Historical Trust.
the succeeding taxable year, enter 20% in column 5, mul-
If you are filing this form to amortize expenses certified
tiply the amount of the basis by that percentage and enter
by the Trust in a prior year, complete Worksheet A and at-
the result in column 6, “Subtraction For This Year”. This is
tach it to your Maryland return.
The total subtraction for the year from Worksheet A, col-
If the taxpayer elects to begin with the month following the
umn 6 should be entered on line 17 of Form 502, line 23 of
month in which the basis is acquired, the maximum percent-
Form 505 or line 6 of Form 504.