Instructions For Form 8912 - Credit To Holders Of Tax Credit Bonds

series of revenue rulings published in the Internal Revenue

amount of the credit in column (f). You must complete lines 15a

Bulletin.

and 15b.

The credit rate for a BAB is 35%.

Line 20

Line 18, Column (e)

Bond Credit. Enter the total amounts from all Parts IV, lines 20,

on Part I, line 2.

Generally, enter 25% for each credit allowance date you hold a

Interest Income. The current year credit on line 4 (or for

CREB, or qualified tax credit bond during your tax year. Enter

estates and trusts, line 6) is deemed to be a payment of qualified

100% for a BAB, or a QZAB issued before October 4, 2008.

stated interest (as defined in Regulations section 1.1273-1(c))

Example. Your tax year begins December 1, 2015, and ends

and as such is treated as taxable interest income paid on the

November 30, 2016. You purchased a QECB on March 16,

credit allowance date, or for BABs, the interest payment date. If

2016, and held it through the end of the tax year ending

the holder is on the accrual method, the holder must accrue the

November 30, 2016. You would enter 50% computed as follows.

credit amount as taxable interest income on the credit allowance

date or interest payment date.

If a holder of a tax credit bond sells the bond between credit

allowance dates (or for BABs, interest payment dates), part of

Credit allowance date

the sales price is treated as accrued interest to the date of the

June 15, 2016

sale and must be reported as interest income. If a holder

September 15, 2016

purchases a bond between credit allowance dates or interest

payment dates, the interest accrued as of the date of the

purchase (as reflected in the purchase price) isn't included as

interest when the purchaser receives the value of the credit (and

However, the 25% will be prorated if a CREB or qualified tax

the deemed payment of interest) on the next credit allowance

credit bond is issued, redeemed, or matures during the 3-month

date or interest payment date. Instead, the payment of the

period ending on a credit allowance date with respect to which

deemed interest is treated as a return of capital to the extent of

you are claiming the credit. The percentage of credit allowed for

the accrued interest at the time of purchase and reduces the

that credit allowance date is prorated for the number of days the

holder’s basis in the bond.

bond was outstanding during the 3-month period.

Paperwork Reduction Act Notice. We ask for the information

Example. Your tax year begins December 1, 2015, and ends

on this form to carry out the Internal Revenue laws of the United

November 30, 2016. You purchased a QECB on March 23,

States. You are required to give us the information. We need it to

2016, the issue date of the bond. Since the bond wasn't held for

ensure that you are complying with these laws and to allow us to

the entire 3-month period ending on June 15, 2016, the prorated

figure and collect the right amount of tax.

portion of the 25% is figured by dividing (a) the number of days

the bond was outstanding beginning on the day after the date

You are not required to provide the information requested on

the bond was issued and ending on the next credit allowance

a form that is subject to the Paperwork Reduction Act unless the

date by (b) the number of days included in the 3-month period

form displays a valid OMB control number. Books or records

beginning on the day after the credit allowance date and ending

relating to a form or its instructions must be retained as long as

on the next credit allowance date. See below.

their contents may become material in the administration of any

Internal Revenue law. Generally, tax returns and return

information are confidential, as required by section 6103.

84 days (number of days from March

The time needed to complete and file this form will vary

24 through June 15)

depending on individual circumstances. The estimated burden

= .913 x 25% = 23%

92 days (number of days from March

for individual taxpayers filing this form is approved under OMB

16 through June 15)

control number 1545-0074 and is included in the estimates

shown in the instructions for their individual income tax return.

The estimated burden for all other taxpayers who file this form is

You would enter 48% computed as follows.

shown below.

Recordkeeping

6 hr., 56 min.

. . . . . . . . . . . . . . . . . . . . . . . . .

Credit allowance date

Learning about the law or the form

1 hr., 59 min.

. . . . . . . . . . . . .

June 15, 2016

Preparing and sending the form to the IRS

2 hr., 11 min.

. . . . . . . .

September 15, 2016

If you have comments concerning the accuracy of these time

estimates or suggestions for making this form simpler, we would

Line 18, Column (f)

be happy to hear from you. See the instructions for the tax return

with which this form is filed.

This amount is the income tax credit to the holder of a tax credit

bond. If the bond credit is from a pass-through entity, enter the

-4-

Instructions For Form 8912 - Credit To Holders Of Tax Credit Bonds - 2015 Page 4

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