Instructions For Form 4255 - Recapture Of Investment Credit (Page 2 of 5) in pdf

I.R.B. 734, available at

https://

the original Form 3468 to complete this

Line 6. Enter the total of all credits taken

form.

for the property on Form 3800 in prior

years. But do not include the amount of

Carryover Adjustment on

any credit previously recaptured due to an

Specific Instructions

Recapture

increase in nonqualified nonrecourse

For property subject to investment credit

financing.

Lines A through D. Describe the

recapture, reduce any remaining

property for which you must refigure the

Part II. Recapture From

carryforwards and carrybacks from the

credit. Use the corresponding column for

Increase in Nonqualified

property by the recapture percentage

each property in Parts I, II, and III. If you

used for the property on line 15.

Nonrecourse Financing

need more property columns, use

additional Forms 4255 or other statements

Basis Adjustment on Recapture

Use Part II to figure any increase in tax for

that include all the information shown on

the recapture of an investment tax credit

For property subject to investment credit

Form 4255. Enter the total from all the

under section 49.

or qualifying therapeutic discovery project

separate statements on lines 17 and 18.

grant recapture, increase the property’s

Generally, section 49(a)(1) applies to

Part I. Original Investment

basis as follows.

property:

For rehabilitation credit property,

Credit

Placed in service by individuals or

qualifying advanced coal project property,

certain closely held corporations during a

Use Part I to refigure the original credit.

qualifying gasification project property,

tax year in which they were engaged in

qualifying advanced energy project

Line 1. Enter the rate you used to figure

activities described in section 465, and

property, or depreciable qualifying

the original credit from the Form 3468 that

Used in connection with an activity

therapeutic discovery project property,

you filed. For heat and power system

subject to the at-risk limitations under

increase the basis by 100% of the amount,

property, enter the effective rate used to

section 465.

attributable to each such property, of the

figure the original credit, taking into

The credit base of this property for

recapture tax, adjustments to carrybacks

account the limit under section 48(c)(3)

investment credit purposes may be limited

and carryforwards under section 39, or

(B).

if you borrowed against the property and

adjustments to disallowed passive activity

Line 2. Enter the credit base (cost or

are protected against loss, or if you

credits.

other basis) that you used to figure the

borrowed money from a person who is

For energy property, increase the basis

original credit.

related or who has an interest (other than

by 50% of the amount, attributable to each

as a creditor) in the business activity. The

If section 49(a)(1) applied to the

such property, of the recapture tax,

credit base must be reduced by the

property and there was a net increase in

adjustments to carrybacks and

amount of any nonqualified nonrecourse

nonqualified nonrecourse financing with

carryforwards under section 39, or

financing related to the property at the end

respect to the property in previous tax

adjustments to disallowed passive activity

of the tax year.

years, enter the credit base you used to

credits. If the reason for recapture is due

figure the original credit, reduced by the

to receipt of a grant under section 1603 of

If, at the close of a tax year following

amount of that net increase. If there was a

the American Recovery and Reinvestment

the year property described in section

net decrease in nonqualified nonrecourse

Act of 2009, the basis of the energy

49(a)(1) was placed in service, the

financing with respect to the property in

nonqualified nonrecourse financing for the

property is reduced by 50% of the grant

previous tax years, enter the credit base

received.

property has increased or decreased, then

you used to figure the original credit,

the credit base for the property changes

If you are a partner or S corporation

increased by the amount of that net

accordingly. The changes may result in an

shareholder, adjust the basis of your

decrease. For more details, see the

increased credit or a recapture of the

interest in the partnership or stock in the S

instructions for Part II.

credit in the year of the change. See

corporation to take into account the

sections 49 and 465 for details.

Line 3. If section 49(a)(1) did not apply to

adjustment made to the basis of property

the property, enter -0-. If section 49(a)(1)

Line 8. If the original credit had been

held by the partnership or S corporation.

applied to the property, enter the net

figured using the current-year tax base in

change in nonqualified nonrecourse

the year the property was first placed in

For more information, see section 50(c)

financing related to the property during the

service, you may have been able to use

and Regulations section 1.469-3(f).

tax year. Enter a net increase in

other general business credits instead.

Partnerships, S Corporations,

nonqualified nonrecourse financing as a

Use

Worksheet 1

to calculate the amount

Estates, and Trusts

positive number. Enter a net decrease in

of unused general business credits that

nonqualified nonrecourse financing as a

would have been allowed under section

A partnership, S corporation, estate, or

negative number. For more information

38.

trust that allocated any or all of a qualified

about section 49, see the instructions for

investment to its partners, shareholders,

When making this calculation,

Part II.

or beneficiaries, must provide the

include any general business

TIP

information they need to refigure the

Line 4. Subtract line 3 from line 2.

credits that could have been

credit. See Regulations sections 1.46-3(f),

carried forward or carried back to a year

If line 3 is negative, then the entry

1.47-4(a) and (c), 1.47-5, and 1.47-6. See

affected by the recapture of the original

on line 4 will be larger than the

TIP

the Instructions for Form 1065-B for

credit. Do not include any credits that were

entry on line 2.

information on recapture of the investment

previously recaptured. If you previously

credit by electing large partnerships.

used the credit to offset the recapture of a

Line 5. Multiply line 1 by line 4. If the

credit on another property, treat it as a

Partners, Shareholders, and

credit for the property for which you must

credit allowed in a previous tax year.

refigure the credit was limited to a dollar

Beneficiaries

amount (for example, by the kilowatt limit

If you are a partner, shareholder, or

Multiple recapture properties. If you

in section 48(c)(1)(B)), do not enter more

beneficiary and your Schedule K-1 shows

are recapturing investment credits from

than the amount of the applicable limit on

recapture of investment credit claimed in

multiple properties in Part II, complete

line 5.

an earlier year, you will need your copy of

Form 4255, line 7 for each property before

Instructions for Form 4255 (Rev. 12-2016)

-2-

Instructions For Form 4255 - Recapture Of Investment Credit Page 2

Related Articles

Related forms

Related Categories