# Instructions For Form 4255 - Recapture Of Investment Credit Page 3

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
Year
Year
Year
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
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
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-.
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
Worksheet 2
to calculate the
6 separately by property and enter the
Instructions for Form 4255 (Rev. 12-2016)
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