Instructions For Form 3468 - Investment Credit

The basis of energy property placed in

2. The building must have been

613(e)(2)). For electricity produced by

service shown on line 2a and the basis

placed in service before the beginning of

geothermal power, include equipment up

and credit rate of any transitional energy

rehabilitation. This requirement is met if

to, but not including, the electrical

transmission stage.

property shown on the attachment to

the building was placed in service by

line 2b,

any person at any time before the

To qualify, the property must be

rehabilitation begins.

The amortizable basis of qualified

constructed, reconstructed, or erected

timber property shown on line 3, and

3. At least 75% of the external walls

by the taxpayer. If acquired by the

must be retained with 50% or more kept

taxpayer, the original use of such

The qualified investment for

in place as external walls. Also, at least

property must commence with the

transitional regular investment credit

75% of the existing internal structural

taxpayer. The property must be subject

property shown on line 4.

framework of the building must be

to depreciation (or amortization in lieu of

Attach the form (with applicable lines

retained in place. This does not apply to

depreciation). The property must meet

of Part I completed) to the partnership,

certified historic structures.

the performance and quality standards,

S corporation, estate, or trust income

if any, that have been prescribed by

A building is considered to be

tax return to show the total cost or basis

regulations and are in effect at the time

“substantially rehabilitated” if your

(or unused credit from a cooperative)

the property is acquired.

rehabilitation expenses during a

that is passed through.

24-month period that you select and

Energy property does not include any

that ends with or within your tax year

property that is public utility property as

Special Limitations for Lines

are more than the greater of:

defined by section 46(f)(5) as in effect on

1a Through 1e, 4, and 12

November 4, 1990.

1. $5,000, or

If energy property is financed in whole

The qualified rehabilitation expenditures

2. Your adjusted basis in the building

on lines 1a through 1e, the qualified

or in part by subsidized energy financing

and its structural components.

or by tax-exempt private activity bonds,

investment on line 4, and the tax liability

Figure your adjusted basis on the first

the amount that you can claim as basis

on line 12 are limited as follows:

day of the 24-month period or the first

is a fraction that is 1 reduced by the

For mutual savings institutions, the

day of your holding period, whichever

fraction, the numerator of which is that

line 1, 4, and 12 amounts are limited to

is later.

portion of the basis allocable to such

50% of the amounts otherwise

If you are rehabilitating the building in

financing or proceeds, and the

determined.

phases under a written architectural plan

denominator of which is the basis of the

For regulated investment companies

and specifications that were completed

property. For example, if the basis of the

and real estate investment trusts, the

before the rehabilitation began,

property is $100,000 and the portion

line 1, 4, and 12 amounts are limited to

substitute “60-month period” for

allocable to such financing or proceeds

a percentage of the amounts otherwise

“24-month period.”

is $20,000, the fraction of the basis that

determined. Figure this percentage by

Enter in the applicable entry space

you may claim the credit on is 4/5

dividing taxable income for the year by

next to lines 1a and 1b the qualified

(i.e., 1 minus $20,000/$100,000).

taxable income figured without regard

rehabilitation expenditures for

Subsidized energy financing means

to the corporation’s deduction for

rehabilitation property. This is property

financing provided under a Federal,

dividends paid.

that is not covered by the transition

state, or local program, a principal

See Regulations section 1.46-4 for

rules. To qualify for the credit, the

purpose of which is to provide

other details.

building must have been originally

subsidized financing for projects

placed in service before 1936 or must

designed to conserve or produce energy.

Part I—Current Year

be a certified historic structure. See

You must reduce the basis by 50% of

section 47(c) for details.

Investment Credit

the energy credit determined.

Enter in the applicable entry space

Line 2b—Transition energy property.—

Lines 1a–1e—Rehabilitation credit.—

next to lines 1c, 1d, and 1e the qualified

If you have energy property that is

You are allowed a credit for certain

rehabilitation expenditures for transition

transition property defined in section

capital costs incurred for additions or

rehabilitation property and certain

49(e) as in effect on November 4, 1990,

improvements to qualified existing

projects. See section 251(d) of the Tax

attach a statement showing how you

buildings and for rehabilitation of

Reform Act of 1986 for details.

figured the allowable credit.

certified historic structures. The

If you are claiming a credit for a

expenditures must be added to the

Reduce any credit by 35% as required

certified historic structure on line 1b or

basis of the building, depreciated by the

by section 49(c) as in effect on

1e, you must attach a copy of your

straight-line method, and incurred in

November 4, 1990.

request for final National Park Service

connection with the rehabilitation of a

Line 3—Reforestation credit.—Enter

(NPS) certification (NPS Form 10-168c).

qualified rehabilitated building.

the portion of the amortizable basis of

Enter the building number assigned by

Decrease the depreciable basis by the

any qualified timber property that was

the NPS in the space provided. If the

amount of the credit.

acquired during the tax year and is

qualified rehabilitation expenditures are

taken into account under section 194.

For filers placing property in service in

from a partnership, S corporation,

Only direct costs for planting and

1994, the qualified rehabilitation

estate, or trust, enter the identifying

seeding can be amortized. These include

expenditures must be for:

number of the flow-through entity in the

costs for site preparation, seed,

space provided.

1. Nonresidential real property,

seedlings, labor, tools, and depreciation

Line 2a—Energy credit.—Enter the

2. Residential rental property (certified

on equipment such as tractors, trucks,

basis of energy property placed in

historic structures only—see Regulations

and tree planters used in planting or

service during the tax year. Energy

section 1.48-1(h)), or

seeding. Depreciation is a direct cost

property is equipment that uses solar

3. Real property that has a class life of

only for the period of time the

energy to generate electricity, to heat or

more than 12

⁄

years.

equipment is used in these activities.

cool (or provide hot water for use in) a

Your building must also meet the

You cannot claim more than $10,000

structure, or to provide solar process

following requirements:

(or $5,000 in the case of a married

heat. Energy property is also equipment

1. The building must be substantially

person filing a separate return) of

used to produce, distribute, or use

rehabilitated.

amortizable basis acquired during the

energy derived from a geothermal

tax year. For more information, see

deposit (within the meaning of section

Page 2

Instructions For Form 3468 - Investment Credit - 1994 Page 2

Related Articles

Related forms

Related Categories