Instructions For Form 3468 - 2016 Page 2

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Any property to which section 48(b), 48A(b)(3), 48B(b)(3),
Beneficiaries of Estates and Trusts below for information that the
48C(b)(2), or 48D(b)(4) applies will no longer qualify as
entity must provide when allocating the credit.
investment credit property when placed in service;
Before the end of the recapture period, your proportionate
Shareholders of S Corporations,
interest is reduced by more than one-third in an S corporation,
Partners of Partnerships, and
partnership (other than an electing large partnership), estate, or
trust that allocated the cost or basis of property to you for which
Beneficiaries of Estates and Trusts
you claimed a credit;
You return leased property (on which you claimed a credit) to
If you are a shareholder, partner (other than a partner in an
the lessor before the end of the recapture period;
electing large partnership), or beneficiary of the designated
A net increase in the amount of nonqualified nonrecourse
pass-through entity, the entity will provide to you the information
financing occurs for any property to which section 49(a)(1)
necessary to complete the following.
applied;
The qualified investment in qualifying advanced coal project
A grant under section 1603 of the American Recovery and
property for lines 5a through 5c.
Reinvestment Tax Act of 2009 was made for section 48 property
The qualified investment in qualifying gasification project
for which a credit was allowed for progress expenditures before
property for lines 6a and 6b.
the grant was made. Recapture is applicable to those amounts
The qualified investment in qualifying advanced energy
previously included in the qualified basis for an energy credit,
project property for line 7.
including progress expenditures, that are also the basis for the
The information for lines 11b through 11f and 11i for the
1603 grant; or
rehabilitation credit.
A grant under section 9023 of the Patient Protection and
The basis of energy property for lines 12a, 12b, 12c, 12f, 12i,
Affordable Care Act was made for investment for which a credit
12l, 12o, 12q, 12r, 12s, and 12t.
was determined under section 48D before the grant was made.
The kilowatt capacity for lines 12d, 12g, and 12j.
The megawatt capacity or horsepower for line 12m.
Exceptions to recapture. Recapture of the investment credit
Lines 1 through 4, if the lessor has elected to treat the lessee
doesn't apply to any of the following.
as having acquired the property.
1. A transfer due to the death of the taxpayer.
2. A transfer between spouses or incident to divorce under
Part I. Information Regarding the Election To
section 1041. However, a later disposition by the transferee is
Treat the Lessee as the Purchaser of Investment
subject to recapture to the same extent as if the transferor had
Credit Property
disposed of the property at the later date.
Generally, for purposes of eligibility for and figuring the amount
3. A transaction to which section 381(a) applies (relating to
of the investment credit, a lessor of property may elect to treat
certain acquisitions of the assets of one corporation by another
the lessee as having acquired the property. Once the election is
corporation).
made, the lessee will be entitled to an investment credit for that
4. A mere change in the form of conducting a trade or
property for the tax year in which the property is placed in
business if:
service and the lessor will generally not be entitled to such a
a. The property is retained as investment credit property in
credit.
that trade or business, and
If the leased property is disposed of, or otherwise ceases to
b. The taxpayer retains a substantial interest in that trade or
be investment credit property, the property will generally be
business.
subject to the recapture rules for early dispositions.
A mere change in the form of conducting a trade or business
For information on making the election, see section 48(d) (as
includes a corporation that elects to be an S corporation and a
in effect on November 4, 1990) and related regulations. For
corporation whose S election is revoked or terminated.
limitations, see sections 46(e)(3) and 48(d) (as in effect on
November 4, 1990).
For more information, see the Instructions for Form 4255.
See section 46(g)(4) (as in effect on November 4, 1990),
Line 2
and related regulations, if you made a withdrawal from a
!
Enter the lessor's full address. Enter the address of the lessor's
capital construction fund set up under the Merchant
CAUTION
principal office or place of business. Include the suite, room, or
Marine Act of 1936 to pay the principal of any debt incurred in
other unit number after the street address. If the post office
connection with a vessel on which you claimed investment
doesn't deliver mail to the street address and the lessor has a
credit.
P.O. box, show the box number instead.
Any required recapture is reported on Form 4255. For details,
Do not use the address of the registered agent for the state in
see Form 4255, Recapture of Investment Credit.
which the lessor is incorporated. For example, if a business is
incorporated in Delaware or Nevada and the lessor's principal
Specific Instructions
place of business is located in Little Rock, AR, you should enter
the Little Rock address.
Generally, (a) an estate or trust whose entire qualified
If the lessor receives its mail in care of a third party (such as
rehabilitation expenditures or bases in energy property
!
an accountant or attorney), enter on the street address line “C/O”
are allocated to beneficiaries, (b) an S corporation, or (c)
CAUTION
followed by the third party's name and street address or P.O.
a partnership (other than an electing large partnership) does not
have to complete and attach Form 3468 to its tax return.
box.
However, if the estate or trust, S corporation, or partnership is
Qualifying Advanced Coal Project Credit
the owner of a certified historic structure, the entity must
complete lines 11g and 11h of the form and attach it to its tax
A qualifying advanced coal project is a project that:
return even if the credit is not being claimed by the entity. See
Uses advanced coal-based generation technology (as
Shareholders of S Corporations, Partners of Partnerships, and
defined in section 48A(f)) to power a new electric generation unit
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Instructions for Form 3468 (2016)

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