Instructions For Form 3468 - 2016 Page 5

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1. The expenditures must be for (a) nonresidential real
certification of completed work on the appropriate lines on the
property, (b) residential rental property (but only if a certified
form. Also attach an explanation, and indicate the amount of
historic structure—see Regulations section 1.48-1(h)), or (c) real
credit claimed in prior years.
property that has a class life of more than 12 years.
If you fail to receive final certification of completed work prior
2. The expenditures must be incurred in connection with the
to the date that is 30 months after the date that you filed the tax
rehabilitation of a qualified rehabilitated building.
return on which the credit was claimed, you must submit a
3. The expenditures must be capitalized and depreciated
written statement to the IRS stating that fact before the last day
using the straight line method.
of the 30th month. You will be asked to consent to an agreement
4. The expenditures can't include the costs of acquiring or
under section 6501(c)(4) extending the period of assessment for
enlarging any building.
any tax relating to the time for which the credit was claimed.
5. If the expenditures are in connection with the
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rehabilitation of a certified historic structure or a building in a
Internal Revenue Service
registered historic district, the rehabilitation must be certified by
Technical Services
the Secretary of the Interior as being consistent with the historic
31 Hopkins Plaza, Room 1108
character of the property or district in which the property is
Baltimore, MD 21201
located. This requirement doesn't apply to a building in a
registered historic district if (a) the building isn't a certified
historic structure, (b) the Secretary of the Interior certifies that
You must retain a copy of the final certification of completed
the building isn't of historic significance to the district, and (c) if
work as long as its contents may be needed for the
the certification in (b) occurs after the rehabilitation began, the
administration of any provision of the Internal Revenue Code.
taxpayer certifies in good faith that he or she wasn't aware of that
certification requirement at the time the rehabilitation began.
If the final certification is denied by the Department of the
Interior, the credit is disallowed for any tax year in which it was
6. The expenditures can't include any costs allocable to the
claimed, and you must file an amended return if necessary. See
part of the property that is (or may reasonably be expected to
Regulations section 1.48-12(d)(7)(ii) for details.
be) tax-exempt use property (as defined in section 168(h) except
that “50 percent” shall be substituted for “35 percent” in
Energy Credit
paragraph (1)(B)(iii)). This exclusion doesn't apply for line 11d.
To qualify as energy property, property must:
Line 11
1. Meet the performance and quality standards, if any, that
have been prescribed by regulations and are in effect at the time
For credit purposes, the expenditures are generally taken into
the property is acquired;
account for the tax year in which the qualified rehabilitated
building is placed in service. However, with certain exceptions,
2. Be property for which depreciation (or amortization in lieu
you may elect to take the expenditures into account for the tax
of depreciation) is allowable; and
year in which they were paid (or, for a self-rehabilitated building,
3. Be property either:
when capitalized) if (a) the normal rehabilitation period for the
a. The construction, reconstruction, or erection of which is
building is at least 2 years, and (b) it is reasonable to expect that
completed by the taxpayer; or
the building will be a qualified rehabilitated building when placed
b. Acquired by the taxpayer if the original use of such
in service. For details, see section 47(d). To make this election,
property must begin with the taxpayer.
check the box on line 11a. The credit, as a percent of
expenditures paid or incurred during the tax year for any
Energy property doesn't include any property acquired before
qualified rehabilitated building, depends on the type of structure
February 14, 2008, or to the extent of basis attributable to
and its location.
construction, reconstruction, or erection before February 14,
2008, that is public utility property, as defined by section 46(f)(5)
Line 11g
(as in effect on November 4, 1990), and related regulations.
If you are claiming a credit for a certified historic structure on
You must reduce the basis of energy property by 50% of the
line 11f, enter the assigned NPS project number on line 11g. If
energy credit determined.
the qualified rehabilitation expenditures are from an S
corporation, partnership, estate, or trust, enter on line 11g the
You must reduce the basis of energy property used for
employer identification number of the pass-through entity
figuring the credit by any amount attributable to qualified
instead of the assigned NPS project number, and skip line 11h
rehabilitation expenditures.
and the instructions below.
Energy property that qualifies for a grant under section 1603
Line 11h
of the American Recovery and Reinvestment Tax Act of 2009
isn't eligible for the energy credit for the tax year that the grant is
Enter the date of the final certification of completed work
made or any subsequent tax year.
received from the Secretary of the Interior on line 11h. If the final
certification hasn't been received by the time the tax return is
Basis reduction. If energy property (acquired before January
filed for a year in which the credit is claimed, attach a copy of the
1, 2009, or to the extent of its basis attributable to construction,
first page of NPS Form 10-168a, Historic Preservation
reconstruction, or erection before January 1, 2009) is financed in
Certification Application (Part 2—Description of Rehabilitation),
whole or in part by subsidized energy financing or by tax-exempt
with an indication that it was received by the Department of the
private activity bonds, reduce the basis of such property under
Interior or the State Historic Preservation Officer, together with
the rules described in Basis reduction for certain financing,
proof that the building is a certified historic structure (or that such
earlier. For property acquired after December 31, 2008, and for
status has been requested). After the final certification of
basis attributable to construction, reconstruction, or erection
completed work has been received, file Form 3468 with the first
after December 31, 2008, there is no basis reduction for property
income tax return filed after receipt of the certification and enter
financed by subsidized energy financing or by tax-exempt
the assigned NPS project number and the date of the final
private activity bonds.
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Instructions for Form 3468 (2016)

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