Form 4255 - Recapture Of Investment Credit Page 3
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Form 4255 (Rev. 12-2012)
Page
Partnerships, S corporations, estates,
sequestration requirements applicable to
recomputation of the original credit
and trusts. For a partnership, S
a Phase II gasification program or a
made available some additional tax
corporation, estate, or trust that
Phase II advanced coal program, enter
liability in that year. See Regulations
allocated any or all of the investment
zero. If a payment was received under
section 1.47-1(d) and Rev. Rul. 72-221,
credit to its partners, shareholders, or
section 1603 of the American Recovery
1972-1 C.B. 15, for details.
beneficiaries, provide the information
and Reinvestment Act of 2009, enter "0".
Figure the unused portion on a
For more information, see Notice
they need to refigure the credit. See
separate statement and enter it on this
2009-23, 2009-16 I.R.B. 802, and Notice
Regulations sections 1.47-4(a) and (c),
line. Do not enter more than the
1.47-5, and 1.47-6. See the instructions
2009-24, 2009-16 I.R.B. 817; as
recapture tax on line 11.
for Form 1065-B for information on
modified by Notice 2011-24, 2011-14 I.
Example 1. In 2009, Maayan earned a
recapture of the investment credit by
R.B. 603.
rehabilitation credit of $100,000 from
electing large partnerships.
Line 7. Enter the recapture percentage
property A. Maayan used all of the credit
Lines A through D. Describe the
from the following table. Enter 100 if a
to offset $100,000 of tax in 2009. In
property for which you must refigure the
payment under section 1603 was
2010, Maayan earned a rehabilitation
credit.
received.
credit of $75,000 from property B and
used none of the credit to offset tax. In
Complete lines 1 through 8 for each
IF the number of full
property on which you are refiguring the
2011, property A ceased to be
years on line 6 of
THEN the recapture
credit. Use a separate column for each
Form 4255 is . . .
percentage is . . .
investment credit property and Maayan
item. If you need more columns, use
0
100
must refigure the credit from property A.
additional Forms 4255 or other
Her recapture percentage is 60%. She
1
80
enters $60,000 on lines 9 and 11.
statements that include all the
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60
information shown on Form 4255. Enter
Because unused investment credits can
3
40
the total from all the separate statements
be carried back one year (5 years for
4
20
on line 9.
ESBC's), Maayan could have carried the
rehabilitation credit from property B back
Line 1. Enter the rate you used to figure
5 or more
0
to the original credit year for property A,
the original credit from the Form 3468
Line 9. If you have used more than one
2009, and she may include $60,000 of
that you filed.
Form 4255, or separate statements to
the $75,000 carryforward from property
Line 2. Enter the cost or other basis that
list additional items on which you
B on line 12. Maayan's total increase in
you used to figure the original credit. If
figured an increase in tax, write to the
tax (line 13) for 2011 is $0.
there has been a net increase in
left of the entry space “Tax from
For a partnership, S corporation,
nonqualified nonrecourse financing with
attached” and the total tax from the
estate, or trust that must recapture any
respect to the property that you have
separate statements. Include the
part of a qualifying therapeutic discovery
disposed of or that has otherwise
amount in the total for line 9.
project grant, figure the increase in tax at
ceased to be investment credit property,
Line 10. For certain taxpayers, the basis
the entity level. Do not complete lines 1
enter the cost or other basis you used to
or cost of property is limited to the
through 13 to figure this increase in tax.
figure the original credit reduced by the
amount the taxpayer is at risk for the
Figure the increase in tax on a separate
amount of that net increase. If there has
property at the end of the tax year. The
statement and enter the result on line 14.
been a net decrease in nonqualified
basis or cost must be reduced by the
See the instructions for line 14.
nonrecourse financing with respect to
amount of any “nonqualified
Partners, shareholders, and
the property, enter the cost or other
nonrecourse financing” related to the
beneficiaries. If your Schedule K-1
basis you used to figure the original
property at the end of the tax year. If
credit plus the amount of that net
shows recapture of investment credit
there is an increase in nonqualified
decrease. For more details, see section
claimed in an earlier year, you will need
nonrecourse financing, recapture may be
49(b).
your copy of the original Form 3468 to
required. See section 49(b) for details.
complete lines 1 through 6 of this Form
Line 3. Enter the amount of the credit
For each property for which there is a
4255.
determined under section 46. If the
net increase in nonqualified nonrecourse
credit determined for the property for
Example 2. In 2009, Ian earned a
financing, figure the tentative recapture
which you must refigure the credit was
rehabilitation credit of $100,000 from
tax by multiplying the net increase by the
limited (for example, by the kilowatt limit
property A. Ian used $1,000 of the credit
percentage originally used to figure the
to offset tax in 2009 and used $99,000
in section 48(c)(1)(B)), do not enter on
credit. Enter the total tentative recapture
line 3 more than the amount of the
as acarryforward to offset tax in 2010. In
tax for all such properties on line 10.
applicable limit.
2011, Ian earned a rehabilitation credit of
Line 12. Generally, enter the amount of
$75,000 from property B and used none
Line 4. Enter the date (month/day/year)
unused credits from line 3 plus the
to offset tax. On February 1, 2011,
on which the property was placed in
amount of any other general business
property A ceased to be investment
service, using the first day of the month
credit carrybacks and carryforwards that
credit property and Ian must refigure the
in which the property is placed in
would have been allowed instead of the
credit from property A. His recapture
service. For example, if the property was
refigured credit. If you did not use all the
percentage is 80%. He enters $80,000
placed in service on February 20, 2010,
credit you originally figured, either in the
on lines 9 and 11. The unused credit for
enter 02/01/2010 on line 4. See
year you figured it or in a carryback or
property B ($75,000) cannot be entered
Regulations section 1.47-1(c) for more
carryforward year, you do not have to
on line 12 because that credit was
information.
recapture the amount of the credit you
earned in 2011 and cannot be carried
did not use. In refiguring the credit for
Line 5. Generally, this will be the date
back two years to 2009, the original
the original credit year, be sure to
you disposed of the property. For more
credit year for property A. Unused
include any carryforwards from previous
details, see Regulations section 1.47-1
investment credits can be carried back
years, plus any carrybacks arising within
(c).
only one year (5 years for ESBC's) and
the first tax year (5 years for eligible
Line 6. Do not enter partial years. If the
any remaining unused credit must be
small business credits (ESBCs) as
property was held less than 12 months,
carried forward. Ian's total increase in
defined in section 38(c)(5)(B)) after the
enter zero. In case of failure to attain or
tax (line 13) for 2011 is $80,000.
original credit year that are now allowed
maintain the separation and
because the recapture and
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