Fillable Form 3468 - Investment Credit - 2016 (Page 10 of 11) in pdf

generation of steam or other forms of useful thermal energy

Line 12q

(including heating and cooling applications); the energy

Enter the basis, attributable to periods after December 31, 2008,

efficiency percentage of which exceeds 60%; and it produces:

of any qualified small wind energy property placed in service

At least 20% of its total useful energy in the form of thermal

during the tax year.

energy that isn't used to produce electrical or mechanical power

(or a combination thereof), and

For the definition of qualified small wind energy property, see

At least 20% of its total useful energy in the form of electrical

the instruction to line 12o above.

or mechanical power (or a combination thereof).

Basis is attributable to periods after December 31, 2008, if

For details, see section 48(c)(3).

the property was acquired after December 31, 2008, or to the

Combined heat and power system property does not

extent of basis attributable to construction, reconstruction, or

include any property placed in service after 2016.

erection by the taxpayer after December 31, 2008.

CAUTION

Line 12r

Basis is attributable to periods after October 3, 2008, if the

Enter the basis, attributable to periods after October 3, 2008, of

property was acquired after October 3, 2008, or to the extent of

any geothermal heat pump system placed in service during the

basis attributable to construction, reconstruction, or erection by

tax year. Geothermal heat pump systems constitute equipment

the taxpayer after October 3, 2008.

which uses the ground or ground water as a thermal energy

Energy efficiency percentage. The energy efficiency

source to heat a structure or as a thermal energy sink to cool a

percentage of a combined heat and power system property is

structure. For details, see section 48(a)(3)(A)(vii).

the fraction—the numerator of which is the total useful electrical,

Geothermal heat pump systems property does not

thermal, and mechanical power produced by the system at

include any property for any period after 2016.

normal operating rates, and expected to be consumed in its

normal application, and the denominator of which is the lower

CAUTION

heating value of the fuel sources for the system. The energy

efficiency percentage is determined on a Btu basis.

Basis is attributable to periods after October 3, 2008, if the

property was acquired after October 3, 2008, or to the extent of

Combined heat and power system property doesn't include

basis attributable to construction, reconstruction, or erection by

property used to transport the energy source to the facility or to

the taxpayer after October 3, 2008.

distribute energy produced by the facility.

Biomass systems. Systems designed to use biomass for at

Line 12s

least 90% of the energy source are eligible for a credit that is

reduced in proportion to the degree to which the system fails to

Enter the basis of any qualified investment credit facility

meet the efficiency standard. For more information, see section

property, other than wind facility property under section 45(d)(1)

48(c)(3)(D).

the construction of which began after 2016, placed in service

during the tax year. Qualified investment credit facility property is

property that:

Line 12o

Is tangible personal property or other tangible property (not

Enter the basis, attributable to periods after October 3, 2008,

including a building or its structural components), but only if the

and before January 1, 2009, of any qualified small wind energy

property is used as an integral part of the qualified investment

property placed in service during the tax year.

credit facility;

Is constructed, reconstructed, erected, or acquired by the

Qualified small wind energy property means property that

taxpayer;

uses a qualifying small wind turbine to generate electricity. For

Depreciation or amortization is allowable; and

this purpose, a qualifying small wind turbine means a wind

The original use begins with the taxpayer.

turbine which has a nameplate capacity of not more than 100

See section 48(a)(5) for details.

kilowatts. For details, see section 48(c)(4). In addition, for small

wind energy property acquired or placed in service (in the case

A qualified investment credit facility is a facility that:

of property constructed, reconstructed, or erected) after

Is a qualified facility under section 45(d)(1), (2), (3), (4), (6),

February 2, 2015, see Notice 2015-4, 2015-5 I.R.B. 407,

(7), (9), or (11) that is placed in service after 2008 and the

available at , as modified

construction of which begins before January 1, 2017 (before

by Notice 2015-51, 2015-31 I.R.B. 133, available at

January 1, 2020, for a qualified facility under section 45(d)(1)).

irb/2015-31_IRB/ar09.html, for performance and quality

See When construction begins below;

standards that small wind energy property must meet to qualify

No credit has been allowed under section 45 for that facility;

for the energy credit.

and

An irrevocable election was made to treat the facility as

Qualified small wind energy property does not include

energy property.

any property for any period after 2016.

When construction begins. Two methods can be used to

CAUTION

establish that construction of a qualified facility has begun.

Basis is attributable to periods after October 3, 2008, and

1. Physical Work Method starts physical work of a

before January 1, 2009, if the property was acquired after

significant nature. For details, see section 4 of Notice 2013-29,

October 3, 2008, and before January 1, 2009, or to the extent of

2013-20 I.R.B. 1085, available at

irb/2013-20_IRB/

basis attributable to construction, reconstruction, or erection by

ar09.htm, as clarified and modified by section 3 of Notice

the taxpayer after October 3, 2008, and before January 1, 2009.

2014-46, 2014-36 I.R.B. 520, available at

irb/

2014-36_IRB/ar09.html, as clarified by section 5 of Notice

Line 12p

2016-31, 2016-23 I.R.B. 1025, available at

irb/

2016-23_IRB/ar07.html.

Enter the smaller of the basis you entered on line 12o or $4,000.

-7-

Instructions for Form 3468 (2016)

Form 3468 - Investment Credit - 2016 Page 10

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