Computation of Investment Credit

> Attach to your tax return.

vom 3468

Department of the Treasury > Schedule B (Business Energy Investment Credit) on back.

OMB No. 1545-0155,

1987

Internal Revenue Service (0) eae mre No 24
Name(s) as shown on return Identifying number
J Part || Elections (Check the box(es) below that apply to you (See Instruction D).)
A. lelect to increase my qualified investment by all qualified progress expenditures (QPE) made this and all later tax years Oo
Enter total qualified progress expenditures included in column (4), Part Il >.
B_Iclaim full credit on certain ships under section 46(g)(3) (See Instruction B for details) . oO
Qualified Investment (Certain Transition Property, QPE Property, and Qualified Timber Property
qa) (2) (3) (4)
7 Recover) Proper we | Ses costorotrersens | domicane | Quaiegeerres
New (a) 3-year
Regular Property (b) Other 100 :
Percentage Used (c) 3-year 60
Property (a) Other 100
2 Nonrecovery property—Enter total qualified investment (See instructions for line 2) 2
3 Total qualified investment in 10% property—Add lines 1@) through 1(d), column (4), and line 2
(See instructions for special limits) . 3
4 Regular credit—(See instructions for line 4 for amount to enter) 4
5 Qualified rehabilitation expenditures (enter qualified investment and multiply by percentage shown):
a Transition Property and Certain Projects placed in service after 12-31-86:
(i) 30-year-old buildings x 10% |Sa(i)
(ii) 40-year-old buildings x 13% |[Satii)
(iii) Certified historic structures (attach NPS | certificate) x 25% [Sail
b Rehabilitation Property (not shown above) placed in service after 12-31-86:
(i) Pre-1936 buildings . x 10% [5b()
(ii) Certified historic structures (attach NPS certificate) . x 20% |Sb(i)
6 Credit from cooperatives—Enter regular investment credit from cooperatives . . 6
7 Business energy investment credit—From line 6 of Schedule B (see back of this form) 7
8 Current year investment credit—Add line 4 through line 7. 8
Note:

ejay Tax Liability Limitations

9a
b

If you have a 1987 jobs credit (Form 5884), credit for alcohol used as fuel (Form 6478), research credit “Form 6765), or low-income housing credit (Form

8586) in addition to your 1987 investment credit, or if you have a carryback or carryforward of any general business c

edit, stop here and go to Form 3800,

General Business Credit, to claim your 1987 investment credit. If you have only a 1987 investment credit (which may include business energy investment

credit), you may continue with lines 9 through 16 to claim your credit.

Individuals—From Form 1040, enter amount from line 43 :
Corporations—From Form 1120, Schedule J, enter tax from line 3 (or Form 1120. A, Part line »

c Other filers—Enter income tax before credits from return . oe : 9
10a Individuals—From Form 1040, enter credit from line 44, Plus any orphan one and
nonconventional source fuel credits included on line 46
b Corporations—From Form 1120, Schedule J, enter credits from | lines 4¢a though 40 «Form
1120-A filers, enter zero) :
c¢ Other filers—See instructions for line 10c 10
11 Income tax liability as adjusted (subtract line 10 from line 9) . pe!
12 Tentative minimum tax—
a_ Individuals—From Form 6251, enter amount from line 17
b Corporations—From Form 4626, enter amount from line 19
¢ Estates and Trusts—From Forrn 8656, enter amount from line 20 12 ee
13 Excess of income tax liability over tentative minimum tax—Subtract line 12 from line 11 13
14a Enter smaller of line 11 or $25,000 (See instructions for line 14) 14a
b Ifline 11 is more than $25,000—Enter 75% of the excess 14b
15 Add lines 14a and 14b ce . ce oe 15
16 Total allowed credit—Enter the smallest of line 8, line 13, or line 15 (corporations, see
instructions)—This is your General Business Credit for 1987. Enter here and on Form 1040, line
45; Form 1120, Schedule J, line 4(e); Form 1120-A, Part |, line 2; or the proper line of other returns | 16

For Paperwork Reduction Act Notice, see separate instructions.

Form 3468 (1987)


Form 3468 (1987)

Page 2

Schedule B.—Business Energy Investment Credit

1___Enter on lines 1(a) through 1(e) your qualified investment in business energy property.

qa) (2) 3) (4) (5)
Type of Property Line Class of Property Code Basis Applicable Qualified Investment
or Life Years Percentage (Column 3 x column 4)
(a) 3-year 60
Reeovery  [®) Other 100
(c) 3 or more but less than 5 33%
Nonrecovery (d) 5 or more but less than 7 66%
(e) 7 or more 100
2 Total qualified investment—Add lines 1(a) through 1(e), column (5) . 2
3 Multiply the portion of the line 2 amount attributable to the following types of property byt the
applicable percentages:
a Solar energy property (12%) 3a
b Biomass and geothermal property (10%) 3b
¢ Ocean thermal property (15%) 3c
4 Certain other property (See instructions below for special limits):
a Certain long-term section 46(b)(2)(A)(i) projects underway by 12-31-82 (10%) 4a
b Hydroelectric generating property placed in service during the year (if docketed with the Federal
Energy Regulatory Commission by 12-31-85) (11%) . . 4b
5 Cooperative credit—Enter business energy investment credit from cooperatives 5
6 Tentative business energy investment credit—Add lines 3a through 5. Enter here and on line 7 of 6
page 1 _ . le Pare _ os

Instructions for Schedule B
(Form 3468)

Energy property must meet the same
requirements as regular investment credit
property, except that the provisions of
sections 48(a)(1) and 48(a)(3) do not apply.
See the separate Instructions for Form
3468 for definitions and rules regarding
regular investment credit property.

Energy property must be acquired new.
See sections 46(b)(2) and 48(I)(1) through
(17) for details.

See section 48(|)(17) for special rules on
public utility property, and section 48(1)(11)
(as amended by the Crude Oil Windfall
Profit Tax Act of 1980) for special rules on
property financed by Industrial
Development Bonds.

Specific Instructions

One Credit Only.—f property qualifies as
more than one kind of energy property, you
may take only one credit for the property.
Line 1—Type of Property.— For
definition of recovery and nonrecovery
property, see the separate Instructions for
Form 3468.

Line 1—Column (2).—Use the code
letters from the following list to indicate the
kind of property for which you are claiming
acredit. If you enter more than one kind of
property on a line, enter the code letter for
each kind of property in column (2) and the

code letter and dollar amount of each kind
of property in the right hand margin.

The code letters are:
a. Biomass property
b. Hydroelectric generating property
¢. Solar equipment (but not passive

solar equipment)
d. Ocean thermal equipment
e. Geothermal equipment
See sections 48(1)(4) and 48(1)(3)(A)(viii)
and (ix) for definitions and special rules that
apply to these kinds of property.
Line 4.—The section 48(q)(4) election to
take a reduced credit instead of adjusting
the basis of the energy property on line 4 is
not available for property placed in service
after 1985, and you must reduce the basis
for depreciation by the full amount of the
credit claimed.

If the installed capacity of hydroelectric
generating property is more than 25
megawatts, the 11% energy credit is
allowed for only part of the qualified
investment. See section 48(1)(13)(C).

On the dotted line for line 4b, enter the
megawatt capacity of the generator as
shown on the nameplate of the generator.

If your tax year begins before and ends
after July 1, 1987, the energy credit(s) on
lines 4a and 4b must be reduced by a
percentage figured from the following
formula:

number of months in your
tax year after June 1987
total number of months
in your tax year

Enter the reduced credit on lines 4a and
4b. Although this reduction may not be used
in the current year or carried back to a prior
year, it may be carried forward to your next
tax year under the following rules.

If you are able to use all of the reduced
credit in the current year, then none of the
reduction may be carried to any other year.

If you are able to use only a portion of
the reduced credit in the current year
because you are limited by tne tax liability
limitations, then you may carry forward to
your next year the unused portion of the
reduced credit and a corresponding portion
of the reduction. If, for example, you are
able to use half of the reduced credit in
1987, then you may carry forward the other
half of the reduced credit and half of the
reduction.

If you are not able to use any of the
reduced credit because of the tax liability
limitations, then you may carry forward to
your next year the entire credit (both the
reduced credit and the reduction).

For tax years beginning after June 30,
1987, you must reduce the energy credit(s)
on lines 4a and 4b by the full 35%. Enter
the reduced credit. (This reduction may not
be carried to any other year.)

35% x

4 U.S.GPO:1987-0-183-234