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

property B back to 2014 had no credit

if any, shown on Form 3468. Enter the

allow us to figure and collect the right

been available from property A. Therefore,

result (but not less than zero) on line 18.

amount of tax.

she enters $75,000 on line 13 and

See the Instructions for Form 1065-B.

You are not required to provide the

$25,000 ($100,000 - $75,000) on line 14.

Line 19. Enter the amount of any

information requested on a form that is

Maayan’s total increase in tax for 2016 is

qualifying therapeutic discovery project

subject to the Paperwork Reduction Act

$15,000 (60% of $25,000). She increases

grant required to be recaptured under

unless the form displays a valid OMB

her basis in property A by $15,000.

section 9023(e) of the ACA.

control number. Books or records relating

Example 4. In 2014, Ian earned a

to a form or its instructions must be

Do not complete lines 1 through 18 to

rehabilitation credit of $100,000 from

retained as long as their contents may

figure this increase in tax. Attach a

property A. Ian used $1,000 of the credit

become material in the administration of

statement showing how you figured the

to offset tax in 2014 and used $99,000 as

any Internal Revenue law. Generally, tax

increase in tax. Do not adjust the increase

a carryforward to offset tax in 2015. In

returns and return information are

in tax for any unused investment credit.

2016, he earned a rehabilitation credit of

confidential, as required by section 6103.

Partnerships, S corporations, estates,

$75,000 from property B and used none of

and trusts, determine the increase in tax at

The time needed to complete and file

the credit to offset tax.

the entity level. This amount will be

this form will vary depending on individual

On February 1, 2016, property A

allocated to the entity owners as a credit

circumstances. The estimated burden for

ceased to be investment credit property

recapture.

individual and business taxpayers filing

and Ian must refigure the credit from

this form is approved under OMB control

Line 20. Enter the line 20 amount on the

property A. His recapture percentage is

number 1545-0074 and 1545-0123 and is

appropriate line of your tax return (for

80%. He enters $100,000 on line 6. No

included in the estimates shown in the

example, 2016 Form 1120, Schedule J,

carryback or carryforward credits are

instructions for their individual and

line 9a). Partnerships (other than electing

available for 2014 to offset the $1,000

business income tax returns. The

large partnerships), enter the amount from

credit used for property A. However, Ian

estimated burden for all other taxpayers

line 20 on Form 1065, Schedule K,

could have carried the rehabilitation credit

who file this form is shown below.

line 20c using code H. See the

of $75,000 from property B back to 2015

Instructions for Form 1065 for more

had no credit been available from property

information on how to allocate this amount

Recordkeeping

6 hr., 27 min.

A that year. Therefore, he enters $75,000

. . . . . .

to the partners. S corporations, enter the

on line 13 and $25,000 ($100,000 -

Learning about the

amount from line 20 on Form 1120S,

$75,000) on line 14. Ian’s total increase in

law or the form

1 hr., 35 min.

. . . . . .

Schedule K, line 17d using code G. See

tax for 2016 is $20,000 (80% of $25,000).

the Instructions for Form 1120S for more

He increases his basis in property A by

Preparing and

information. Estates and trusts, enter the

$20,000.

sending the form to

amount from line 20 on Form 1041,

the IRS

1 hr., 46 min.

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

Lines 17 and 18. If you used separate

Schedule G, line 5. See the Instructions

statements to list additional properties,

for Form 1041 for more information.

write to the left of the entry space “Tax

from attached” and the total tax from the

Paperwork Reduction Act Notice. We

If you have comments concerning the

separate statements. Include the amounts

ask for the information on this form to carry

accuracy of these time estimates or

from these statements in the totals for

out the Internal Revenue laws of the

suggestions for making this form simpler,

lines 17 and 18, respectively.

United States. You are required to give us

we would be happy to hear from you. See

the information. We need it to ensure that

the instructions for the tax return with

Special rule for electing large

you are complying with these laws and to

which this form is filed.

partnerships. Before entering the result

on line 18, subtract the current year credit,

Instructions for Form 4255 (Rev. 12-2016)

-5-

Instructions For Form 4255 - Recapture Of Investment Credit Page 5

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