Sc Sch.tc-56a - Application For Angel Investor Credit (Page 4 of 4) in pdf

If an angel investor taxpayer recognized net capital gain on the sale or exchange of credit assets in a tax year, then the

amount of net capital gain of that taxpayer eligible for the deduction is reduced by the net capital gain on the sale or

exchange of credit assets.

“Angel investor taxpayer” means a taxpayer who invested in a capital asset and as a result of that investment was eligible

to claim the tax credit allowed pursuant to this chapter.

“Net capital gain” is as defined in Internal Revenue Code Section 1222 and related sections.

“Credit asset” means a capital asset acquired by an angel investor taxpayer who was eligible to claim the tax credit allowed

pursuant to this chapter with respect to the acquisition.

In a separate computation each tax year, the angel investor taxpayer must attribute the net capital gain on credit assets to

each credit asset in the ratio that the long term capital gain on each separate credit asset as a proportion of all such long

term gain bears to the required net capital gain reduction. If cumulative net capital gain on a credit asset multiplied by 7%

equals the total credit claimed on the credit asset, the excess of the net capital gain attributable to this credit asset over that

necessary to produce the total credit amount in the computation is deducted from the required reduction.

If an angel investor taxpayer recognized net capital loss on the sale or exchange of credit assets in a tax year in an amount

equal to or less than the total of tax credits claimed on those credit assets, then there is added to the angel investor

taxpayer's South Carolina taxable income for that tax year the amount of the net capital loss on those credit assets not to

exceed the tax credits claimed on those credit assets.

If an angel investor taxpayer recognized net capital loss on the sale or exchange of credit assets in a tax year in an amount

greater than the amount of the tax credits claimed on those credit assets, then there is added to the angel investor

taxpayer's South Carolina taxable income for that tax year the amount of the tax credit claimed on those credit assets.

“Net capital loss” is as defined in Internal Revenue Code Section 1211(b), not including the limitation imposed pursuant to

Section 1211(b)(1).

Social Security Privacy Act Disclosure

It is mandatory that you provide your social security number on this tax form if you are an individual taxpayer. 42 U.S.C.

405(c)(2)(C)(i) permits a state to use an individual's social security number as means of identification in administration of

any tax. SC Regulation 117-201 mandates that any person required to make a return to the SC Department of Revenue

shall provide identifying numbers, as prescribed, for securing proper identification. Your social security number is used for

identification purposes.

The Family Privacy Protection Act

Under the Family Privacy Protection Act, the collection of personal information from citizens by the Department of Revenue

is limited to the information necessary for the Department to fulfill its statutory duties. In most instances, once this

information is collected by the Department, it is protected by law from public disclosure. In those situations where public

disclosure is not prohibited, the Family Privacy Protection Act prevents such information from being used by third parties for

commercial solicitation purposes.

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Sc Sch.tc-56a - Application For Angel Investor Credit Page 4