Form 527-A - Small Business Capital Company Report For Investors - 2011 Page 3
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32011 Form 527-A - Page 3
Instructions and Guidelines for Preparing
Small Business Capital Company Report for Investors
68 OS Sec. 2357.60-2357.65 and Rule 710:50-15-86
Credits
There shall be allowed a credit equal to 20% of a qualified investment in a qualified Small Business Capital Company
which is subsequently invested in an Oklahoma Small Business Venture. The credit may only be claimed in the tax year
in which the Small Business Capital Company makes the qualified investment in an Oklahoma Small Business Venture if
the funds are used in pursuit of a legitimate business purpose of the Oklahoma Small Business Venture consistent with
its organizational instrument, bylaws or other agreement responsible for the governance of the Small Business Venture.
If the tax credit exceeds the amount of tax liability, the amount of unused credit may be carried forward for a period not to
exceed three years.
There shall also be allowed a credit equal to 20% of the investment in Oklahoma Small Business Ventures in conjunction
with qualified investment in such ventures made by a qualified Small Business Capital Company. To qualify for the credit,
a qualified investment shall be:
1.
Made by a shareholder or partner of a qualified Small Business Capital Company that has made a qualified in-
vestment in an Oklahoma small business venture;
2.
Invested in the purchase of equity or near-equity in an Oklahoma Small Business Venture;
3.
Made under the same terms and conditions as the qualified investment made by the qualified Small Business
Capital Company; and
4.
Limited to the lesser of:
a. 200% of any qualified investment by the taxpayer in the qualified Small Business Capital Company, or
b. 200% of any qualified investment made by the qualified Small Business Capital Company in the Oklahoma
Small Business Venture.
If the tax credit exceeds the amount of tax liability, the amount of unused credit may be carried forward for a period not to
exceed three years.
The credit shall be allowed against income tax imposed by Section 2355 or the bank “in lieu” tax imposed by Section 2370.
No credit will be allowed for qualified investments made prior to January 1, 1998 or from June 1, 2010 to December 31,
2011, nor for the same qualified investment for which a Rural Small Business Capital Credit is claimed under Section
2357.73 or 2357.74.
Recapture
The Oklahoma Tax Commission is authorized to recapture the credit if it finds that the transaction does not meet the
requirements of the Small Business Capital Formation Incentive Act.
Reporting Requirement
The Small Business Capital Company must furnish this form to the investor by January 31st of the year following when
the investment becomes eligible for the credit. A copy must be enclosed with the investor’s income tax return if the credit
is claimed. If the investor is a partnership, S-Corporation or other pass-through entity, such entity must provide to each
partner, shareholder or member documentation showing their share of the “total credit allowed in 2011”. Such documenta-
tion must be provided with the partner’s, shareholder’s or member’s income tax return when their share of the credit is be-
ing claimed.
Part 2 – 2011 Credit Carryover
The credit not used may be carried over, in order, to each of the three years following the year in which the credit was
eligible to be claimed. Complete Part 2 to compute the amount of the 2011 credit carryover to be used in each of the next
three subsequent years. Keep a copy of this form to file with your return for each such year in which the 2011 credit car-
ryover is claimed.
Notice
Effective July 1, 2011
Tax credits transferred or allocated must be reported on Oklahoma Tax Commission Form 569. Failure to file Form 569
will result in the affected credits being denied by the Oklahoma Tax Commission pursuant to 68 OS Sec. 2357.1A-2.
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