Instructions For Form 4255 - Recapture Of Investment Credit (Page 3 of 5) in pdf

Worksheet 1

Use Worksheet 1 to calculate the amount of unused general business credits that would have been allowed instead of the credit from

the recapture property. If you need to account for more than five years, complete Steps 4 through 6 for those years on additional

copies of the worksheet. Include the total for all years on Step 7.

First

Year

Steps

______

Total

Step 1. Identify the first year that the aggregate amount of credit

allowed for the property was more than the amount on line 5.

Enter the excess as a positive number

______

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

Step 2. Figure the amount of other general business credits that

could have been used in that year had the amount in Step 1 not

been allowed. Enter the result as a positive number

______

. . . . . . . .

Step 3. Subtract any general business credits that were actually

allowed in any previous tax year from the result of Step 2

______

. . . .

Step 4. For the following year, figure the reduction in general business

credits that would have been allowed for that year if:

1. No amount on line 7 had been allowed as a credit, and

2. Any other credits were used as calculated in Step 2 above

______

. . . . . . . . .

Step 5. Figure the amount of other general business credits that would have

been allowed to offset the reduction figured in Step 4

______

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

Step 6. Subtract any general business credits that were actually allowed in

any previous tax year from the result of Step 5

______

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

Step 7. Repeat Steps 4 through 6 above for each of the following tax years. Then add the amount from Step 3 to the

amount from each iteration of Step 6. Enter the result on line 8

______

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

Part III. Recapture From

using Worksheet 1. Then fill out

credits that would have been allowed

Worksheet 1, reapplying any allowable

under section 38.

Disposition of Property or

investment credits as if no credit had been

Cessation of Use as Investment

When making this calculation,

allowed for any of the properties in excess

include any general business

Credit Property

TIP

of the refigured credit for that property on

credits that could have been

line 5. As you complete the worksheet,

Use Part III to figure any increase in tax for

carried forward or carried back to a year

separately identify the amount of unused

the recapture of an investment tax credit

affected by the recapture of the original

general business credits that could have

or qualified therapeutic discovery grant

credit. Do not include any credits that were

been used instead of the excess credit

under section 50.

previously recaptured. If you previously

from each property. If an unused general

used the credit to offset the recapture of a

Line 10. Enter the date (month/day/year)

business credit could have been used

credit on another property, treat it as a

on which the property was placed in

instead of the excess credit from more

credit allowed in a previous tax year.

service, using the first day of the month in

than one property (for example, the

which the property was placed in service.

amount figured in Step 1 or Step 3 for a

Multiple recapture properties. If you

For example, if the property was placed in

single year is attributable to more than one

are recapturing investment credits from

service on February 20, 2014, enter

property), apply the unused credit to the

multiple properties in Part II, complete

02/01/2014 on line 10. See Regulations

property with the highest original credit

Form 4255, line 6 for each property before

section 1.47-1(c) for more information.

rate on line 1. When completing Step 7,

using Worksheet 2. Then fill out

add the amounts from Steps 3 and 6

Line 11. Generally, this will be the date

Worksheet 2, reapplying any allowable

separately by property and enter the

you disposed of the property. For more

investment credits as if no credit had been

results in the corresponding property

details, see Regulations section 1.47-1(c).

allowed for any of the properties. As you

column of line 8.

complete the worksheet, separately

Line 12. Do not enter partial years. If the

Disallowed passive activity credits

identify the amount of unused general

property was held less than 12 months,

(as defined in section 469(d)(2))

business credits that could have been

enter -0-. In case of failure to attain or

can be used in the calculation of

used instead of the recaptured credit from

maintain the separation and sequestration

CAUTION

line 8 only to the extent that credits from

each property. If an unused general

requirements applicable to a Phase II or III

passive activities are included in the

business credit could have been used

gasification program or a Phase II or III

credits subject to recapture.

instead of a recaptured credit from more

advanced coal program, enter -0-. If a

than one property (for example, the

grant was received under section 1603 of

Unused credits other than “specified

amount figured in Step 1 or Step 3 for a

the American Recovery and Reinvestment

credits” (as defined in section 38(c)(4)(B))

single year is attributable to more than one

Act of 2009, enter -0-.

and eligible small business credits

property), apply the unused credit first to

Line 13. If you had never taken the

(ESBCs) can be used in the calculation of

the property with the highest recapture

recaptured credit, you may have been

line 8 taking into account the limitation

percentage on line 15. When completing

able to use other general business credits

under section 38(c)(1)(A).

Step 7, add the amounts from Steps 3 and

instead. Use

Worksheet 2

to calculate the

6 separately by property and enter the

amount of unused general business

Instructions for Form 4255 (Rev. 12-2016)

-3-

Instructions For Form 4255 - Recapture Of Investment Credit Page 3

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