OMB No. 1545-0155

Investment Credit

Form 3468

© Attach to your tax return. See instructions. Attachment

Sequence No. 52

Name(s) shown on return Identifying number

1g

1

f

5

6

6

For Paperwork Reduction Act Notice, see instructions. Form 3468 (Rev. 12-2006)

Rehabilitation credit (see instructions for requirements that must be met):

e Pre-1936 buildings located in the Gulf Opportunity Zone × 13% (.13)

Other pre-1936 buildings × 10% (.10)

5 Credit from cooperatives. Enter the unused investment credit from cooperatives

Add lines 1e through 1h, 1k, 2i, 3c, 4, and 5. Report this amount on the applicable line of

Form 3800 (e.g., line 1a of the 2006 Form 3800)

1h

Cat. No. 12276E

Check this box if you are electing under section 47(d)(5) to take your qualified rehabilitation

expenditures into account for the tax year in which paid (or, for self-rehabilitated property,

when capitalized). See instructions. Note: This election applies to the current tax year and to 

all later tax years. You may not revoke this election without IRS consent ©

a

Enter the amount of qualified rehabilitation expenditures and multiply by the percentage shown:

k Rehabilitation credit from an electing large partnership (Schedule K-1 (Form 1065-B), box 9) 1k

(99)

Enter the assigned NPS project number or the pass-through entity’s

employer identification number (see instructions)

Enter the date that the NPS approved the Request for Certification of 

Completed Work (see instructions)

Enter the date on which the 24- or

60-month measuring period begins

Enter the adjusted basis of the building as of the beginning date above 

(or the first day of your holding period, if later)

Enter the amount of the qualified rehabilitation expenditures incurred, 

or treated as incurred, during the period on line 1b above

$

$

i

j

c

d

b

/ /

/ /

$

$

and ends / /

Department of the Treasury

Internal Revenue Service

2 Energy credit:

2a

a Basis of property using geothermal energy placed in service during

the tax year (see instructions) $ × 10% (.10)

b Basis of property using solar illumination or solar energy placed in service

during the tax year (see instructions) $ × 30% (.30) 2b

Qualified fuel cell property (see instructions):

$ × 30% (.30) 2c

Basis of property installed during the tax

year

c

× $1,000 2d

Kilowatt capacity of property in c

above ©

d

e Enter the lesser of line 2c or 2d 2e

Qualified microturbine property (see instructions):

$ × 10% (.10) 2f

Basis of property installed during the tax

year

f

× $200 2g

Kilowatt capacity of property in f

above ©

g

h Enter the lesser of line 2f or 2g 2h

i Total. Add lines 2a, 2b, 2e, and 2h 2i

3 Qualifying advanced coal project credit (see instructions):

3a

a Basis of qualified investment in integrated gasification combined cycle property 

placed in service during the tax year $ × 20% (.20)

b Basis of qualified investment in property other than in a above placed

in service during the tax year © $ × 15% (.15) 3b

4

c Total. Add lines 3a and 3b

Qualifying gasification project credit (see instructions). Basis of qualified investment in property

placed in service during the tax year © $ × 20% (.20)

3c

4

(Rev. December 2006)

h

g Certified historic structures located in the Gulf Opportunity Zone × 26% (.26)

Other certified historic structures × 20% (.20)

$

$

1e

1f

For properties identified on lines 1g or 1h, complete lines 1i and 1j
Form 3468 (Rev. 12-2006) Page 2

Section references are to the Internal Revenue Code unless

otherwise noted.

General Instructions

Purpose of Form

Use Form 3468 to claim the investment credit. The

investment credit consists of the rehabilitation, energy,

qualifying advanced coal project, and qualifying gasification

project credits.

Investment Credit Property

Investment credit property is any depreciable or amortizable

property that qualifies for the rehabilitation credit, energy

credit, qualifying advanced coal project credit, or qualifying

gasification project credit.

You cannot claim a credit for property that is:

● Used mainly outside the United States (except for property

described in section 168(g)(4));

● Used by a governmental unit or foreign person or entity

(except for a qualified rehabilitated building leased to that

unit, person, or entity; and property used under a lease with

a term of less than 6 months);

● Used by a tax-exempt organization (other than a section

521 farmers’ cooperative) unless the property is used mainly

in an unrelated trade or business or is a qualified

rehabilitated building leased by the organization;

● Used for lodging or in the furnishing of lodging (see section

50(b)(2) for exceptions); or

Election for Certain Leased Property

If you lease property to someone else, you may elect to treat

all or part of your investment in new property as if it were

made by the person who is leasing it from you. Lessors and

lessees should see section 48(d) (as in effect on November 4,

1990) and related regulations for rules on making this

election. For limitations, see sections 46(e)(3) and 48(d) (as in

effect on November 4, 1990).

What’s New

● That is energy property used in a facility that qualifies for a

credit under section 45.

At-Risk Limit for Individuals and Closely Held

Corporations

● The tax liability limit is no longer figured on this form;

instead, it must be figured on Form 3800, General Business

Credit.

● The IRS will revise this December 2006 version of the form

only when necessary. Continue to use this version for tax

years beginning after 2005 until a new revision is issued.

● Any property to which section 48(b) applies will no longer

qualify as investment credit property when placed in service;

● Before the end of the recapture period, your proportionate

interest is reduced by more than one-third in an S

corporation, partnership (other than an electing large

partnership), estate, or trust that allocated the cost or basis

of property to you for which you claimed a credit;

● You return leased property (on which you claimed a credit)

to the lessor before the end of the recapture period; or

● A net increase in the amount of nonqualified nonrecourse

financing occurs for any property to which section 49(a)(1)

applied.

Exceptions to recapture. Recapture of the investment credit

does not apply to any of the following.

● A transfer due to the death of the taxpayer.

● A transfer between spouses or incident to divorce under

section 1041. However, a later disposition by the transferee

is subject to recapture to the same extent as if the transferor

had disposed of the property at the later date.

● A transaction to which section 381(a) applies (relating to

certain acquisitions of the assets of one corporation by

another corporation).

● A mere change in the form of conducting a trade or

business if:

1. The property is retained as investment credit property in

that trade or business, and

2. The taxpayer retains a substantial interest in that trade

or business.

A mere change in the form of conducting a trade or

business includes a corporation that elects to be an S

corporation and a corporation whose S election is revoked or

terminated.

See section 46(g)(4) (as in effect on November 4,

1990) if you made a withdrawal from a capital

construction fund set up under the Merchant

Marine Act of 1936 to pay the principal of any debt

incurred in connection with a vessel on which you claimed

investment credit.

For details, see Form 4255, Recapture of Investment

Credit.

CAUTION

Recapture of Credit

You may have to refigure the investment credit and recapture all

or a portion of it if:

● You dispose of investment credit property before the end

of 5 full years after the property was placed in service

(recapture period);

● You change the use of the property before the end of the

recapture period so that it no longer qualifies as investment

credit property;

● The business use of the property decreases before the end

of the recapture period so that it no longer qualifies (in whole

or in part) as investment credit property;

● Any building to which section 47(d) applies will no longer

be a qualified rehabilitated building when placed in service;

● Additional time is provided for buildings in the Gulf

Opportunity (GO) Zone, Rita GO Zone, and Wilma GO Zone

to meet certain tests in order to be a qualified rehabilitated

building. For the affected areas, see Pub. 4492, Information

for Taxpayers Affected by Hurricanes Katrina, Rita, and

Wilma. For details on the relief provided, see items 2 and 3

on page 3 and Notice 2006-38, 2006-16 I.R.B. 777.

of a tax year following the year property was placed in

service, the nonqualified nonrecourse financing for any

property has increased or decreased, then the credit base for

the property changes accordingly. The changes may result in

an increased credit or a recapture of the credit in the year of

the change. See sections 49 and 465 for details.

The cost or basis of property for investment credit purposes

may be limited if you borrowed against the property and are

protected against loss, or if you borrowed money from a

person who is related or who has other than a creditor

interest in the business activity. The cost or basis must be

reduced by the amount of this “nonqualified nonrecourse” 

financing related to the property as of the close of the tax

year in which the property is placed in service. If, at the close
Form 3468 (Rev. 12-2006) Page 3

To be a qualified rehabilitated building, your building must

meet all five of the following requirements.

1. The building must have been placed in service (see

requirement 4) prior to 1936 unless it is a certified historic

structure. A certified historic structure is any building (a)

listed in the National Register of Historic Places, or (b)

located in a registered historic district (as defined in section

47(c)(3)(B)) and certified by the Secretary of the Interior as

being of historic significance to the district. Certification

requests are made through your State Historic Preservation

Officer on National Park Service (NPS) Form 10-168a,

Historic Preservation Certification Application. The request for

certification should be made prior to physical work beginning

on the building.

If the adjusted basis of the building is determined in whole or

in part by reference to the adjusted basis of a person other than

the taxpayer, see Regulations section 1.48-12(b)(2)(viii) for

additional information that must be attached.

Lines 1a Through 1k. Rehabilitation 

Credit

You are allowed a credit for qualified rehabilitation

expenditures made for any qualified rehabilitated building.

You must reduce your depreciable basis by the amount of

the credit. 4. The building must have been placed in service before

the beginning of rehabilitation. This requirement is met if the

building was placed in service by any person at any time

before the rehabilitation began.

5. For a building other than a certified historic structure (a)

at least 75% of the external walls must be retained with 50%

or more kept in place as external walls, and (b) at least 75%

of the existing internal structural framework of the building

must be retained in place.

1. The expenditures must be for (a) nonresidential rental

property, (b) residential rental property (but only if a certified

historic structure—see Regulations section 1.48-1(h)), or (c)

real property that has a class life of more than 12 years.

2. The expenditures must be incurred in connection with

the rehabilitation of a qualified rehabilitated building.

3. The expenditures must be capitalized and depreciated

using the straight line method.

4. The expenditures cannot include the costs of acquiring or

enlarging any building.

5. If the expenditures are in connection with the

rehabilitation of a certified historic structure or a building in a

registered historic district, the rehabilitation must be certified

by the Secretary of the Interior as being consistent with the

historic character of the property or district in which the

property is located. This requirement does not apply to a

building in a registered historic district if (a) the building is not

a certified historic structure, (b) the Secretary of the Interior

certifies that the building is not of historic significance to the

district, and (c) if the certification in (b) occurs after the

rehabilitation began, the taxpayer certifies in good faith that he

or she was not aware of that certification requirement at the

time the rehabilitation began.

2. The building must be substantially rehabilitated. A

building is considered substantially rehabilitated if your

qualified rehabilitation expenditures during a self-selected

24-month period that ends with or within your tax year are

more than the greater of $5,000 or your adjusted basis in the

building and its structural components. Figure adjusted basis

on the first day of the 24-month period or the first day of

your holding period, whichever is later. If you are

rehabilitating the building in phases under a written

architectural plan and specifications that were completed

before the rehabilitation began, substitute “60-month period” 

for “24-month period.”

To be qualified rehabilitation expenditures, your

expenditures must meet all six of the following requirements.

● The basis of energy property for lines 2a and 2b.

● The basis for energy property for lines 2c and 2f and the

kilowatt capacity for lines 2d and 2g, respectively.

● The basis of the qualifying investment in advanced coal

project property for lines 3a and 3b.

● The basis of the qualifying investment in a gasification project

property for line 4.

Specific Instructions

If you are a shareholder, partner (other than a partner in an

electing large partnership), or beneficiary of the designated

pass-through entity, the entity will provide to you the

information necessary to complete the following:

● Lines 1b through 1h for the rehabilitation credit.

Note. Do not attach this form to your tax return if you are (a)

an estate or trust whose entire qualified rehabilitation

expenditures or bases in energy property are allocated to the

beneficiaries, (b) an S corporation, or (c) a partnership (other

than an electing large partnership). However, you must

complete lines 1i and 1j of this form and attach it if you are

the owner of a certified historic structure.

Shareholders of S Corporations, Partners

of Partnerships, and Beneficiaries of

Estates and Trusts

If the building is in one of the designated counties or

parishes in the GO Zone, Rita GO Zone, or Wilma GO Zone,

the “24-month period” and “60-month period” is extended by

12 months. However, the rehabilitation must have begun, but

not been completed, and the building placed in service prior

GO Zone

States

GO Zone

Rita GO Zone

Wilma GO Zone

Florida

Louisiana, Mississippi,

and Alabama

Louisiana and Texas

Florida

August 24, 2005

August 29, 2005

September 23, 2005

October 23, 2005

Date

3. Depreciation must be allowable with respect to the

building. Depreciation is not allowable if the building is

permanently retired from service. If the building is damaged,

it is not considered permanently retired from service where

the taxpayer repairs and restores the building and returns it

to actual service within a reasonable period of time.

For a building damaged in the GO Zone, Rita GO Zone, or

Wilma GO Zone, that reasonable period is deemed to be up

to 36 months, subject to the following qualifications.

● The building must have been placed in service prior to the

date as given in the table above.

● The relevant 36-month period for that building starts on the

same date as given in the table above.

● Beginning no later than August 15, 2006, the taxpayer must

be engaged in the repair or restoration of building, defined as:

a. Ongoing physical repairs,

b. Written contracts in place for the repair or restoration to

be completed within the designated 36-month period, or

c. Active negotiation of contracts for the repair or

restoration to be completed within the designated 36-month

period, but only if the contracts are finalized prior to January

1, 2007.
Form 3468 (Rev. 12-2006) Page 4

Lines 2a Through 2i. Energy Credit

To qualify, energy property must be constructed,

reconstructed, or erected by the taxpayer. If acquired by the

taxpayer, the original use of such property must begin with

the taxpayer. The property must meet the performance and

quality standards, if any, that have been prescribed by

regulations and are in effect at the time the property is

acquired. Energy property does not include any property that

is public utility property as defined by section 46(f)(5) (as in

effect on November 4, 1990).

If the final certification is denied by the Department of

Interior, the credit is disallowed for any tax year in which it

was claimed, and you must file an amended return if

necessary. See Regulations section 1.48-12(d)(7)(ii) for

details.

You must reduce the depreciable basis by 50% of the

energy credit determined.

You also must reduce the basis of energy property by any

amount attributable to qualified rehabilitation expenditures.

Line 2a

is 1 reduced by a second fraction, the numerator of which is

that portion of the basis allocable to such financing or

proceeds, and the denominator of which is the basis of the

property. For example, if the basis of the property is

$100,000 and the portion allocable to such financing or

proceeds is $20,000, the fraction of the basis that you may

claim the credit on is 4⁄5 (that is, 1 minus $20,000/$100,000).

Subsidized energy financing means financing provided under

a federal, state, or local program, a principal purpose of

which is to provide subsidized financing for projects

designed to conserve or produce energy.

Line 2f

Enter the basis of any qualified microturbine property placed

in service during the tax year. Qualified microturbine property

is a stationary microturbine power plant which generates less

than 2,000 kilowatts and has an electricity-only generation

efficiency of not less than 26 percent at International

Standard Organization conditions. See section 48(c)(2) for

further details.

Lines 3a Through 3c and Line 4

The basis of property may have to be reduced for certain

financing received under rules similar to section 48(a)(4) and

described in the first paragraph under Lines 2a through 2i.

Energy Credit.

Enter the basis of any property using geothermal energy

placed in service during the tax year. Geothermal energy

property is equipment that uses geothermal energy to

produce, distribute, or use energy derived from a geothermal

deposit (within the meaning of section 613(e)(2)). For

electricity produced by geothermal power, equipment

qualifies only up to, but not including, the electrical

transmission stage.

Line 2c

Enter the basis of any qualified fuel cell property placed in

service during the tax year. Qualified fuel cell property is a

fuel cell power plant that generates at least 0.5 kilowatt of

electricity using an electrochemical process and has

electricity-only generation efficiency greater than 30 percent.

You must retain a copy of the final certification of See section 48(c)(1) for further details.

completed work as long as its contents may be needed for

the administration of any provision of the Internal Revenue

Code.

6. The expenditures cannot include any costs allocable to

the part of the property that is (or may reasonably expect to

be) tax-exempt use property (as defined in section 168(h)).

For credit purposes, the expenditures are generally taken

into account for the tax year in which the qualified

rehabilitated building is placed in service. However, with

certain exceptions, you may elect to take the expenditures

into account for the tax year in which they were paid (or, for a

self-rehabilitated building, when capitalized) if (a) the normal

rehabilitation period for the building is at least 2 years, and (b)

it is reasonable to expect that the building will be a qualified

rehabilitated building when placed in service. For details, see

section 47(d). To make this election, check the box on line

1a.

If you are claiming a credit for a certified historic structure

on line 1g or 1h, enter the assigned NPS project number on

line 1i. If the qualified rehabilitation expenditures are from an

S corporation, partnership, estate, or trust, enter on line 1i

the employer identification number of the pass-through entity

instead of the assigned NPS project number, and skip line 1j

and the instructions below.

Enter the date of the final certification of completed work

received from the Secretary of the Interior on line 1j. If the

final certification has not been received by the time the tax

return is filed for a year in which the credit is claimed, attach

a copy of the first page of NPS Form 10-168a, Historic

Preservation Certification Application (Part 2—Description of

Rehabilitation), with an indication that it was received by the

Department of the Interior or the State Historic Preservation

Officer, together with proof that the building is a certified

historic structure (or that such status has been requested).

After the final certification of completed work has been

received, file Form 3468 with the first income tax return filed

after receipt of the certification and enter the assigned NPS

project number and the date of the final certification of

completed work on the appropriate lines on the form. Also

attach an explanation, and indicate the amount of credit

claimed in prior years.

The credit, as a percent of expenditures paid or incurred

during the tax year for any qualified rehabilitated building,

depends on the type of structure and its location.

Line

1e

1f

1g

1h

For the definition of the GO Zone, see section 1400M and Pub. 4492.

%

13

10

26

20

If the structure is. . .

Other than a certified

historic structure

Certified historic structure

Other than a certified

historic structure

Certified historic structure

Located. . .

In the GO Zone

In the GO Zone

Elsewhere than in the GO

Zone

Elsewhere than in the GO Zone

If energy property is financed in whole or in part by

subsidized energy financing or by tax-exempt private activity

bonds, the amount that you can claim as basis is the basis

that would otherwise be allowed multiplied by a fraction that

1. Equipment that uses solar energy to illuminate the inside

of a structure using fiber-optic distributed sunlight.

Line 2b

Enter the basis of any property using solar energy placed in

service during the tax year. There are two types of property.

2. Equipment that uses solar energy to:

● Generate electricity,

● Heat or cool (or provide hot water for use in) a structure, or

● Provide solar process heat (but not to heat a swimming

pool).
Form 3468 (Rev. 12-2006) Page 5

Paperwork Reduction Act Notice. We ask for the

information on this form to carry out the Internal Revenue

laws of the United States. You are required to give us the

information. We need it to ensure that you are complying

with these laws and to allow us to figure and collect the right

amount of tax.

Recordkeeping 13 hr., 9 min.

Learning about the

law or the form 3 hr., 34 min.

Preparing and sending

the form to the IRS 3 hr., 57 min.

You are not required to provide the information requested

on a form that is subject to the Paperwork Reduction Act

unless the form displays a valid OMB control number. Books

or records relating to a form or its instructions must be

retained as long as their contents may become material in

the administration of any Internal Revenue law. Generally, tax

returns and return information are confidential, as required by

section 6103.

If you have comments concerning the accuracy of these

time estimates or suggestions for making this form simpler,

we would be happy to hear from you. See the instructions for

the tax return with which this form is filed.

The time needed to complete and file this form will vary

depending on individual circumstances. The estimated

burden for individual taxpayers filing this form is approved

under OMB control number 1545-0074 and is included in the

estimates shown in the instructions for their individual

income tax return. The estimated burden for all other

taxpayers who file this form is shown below:

A qualifying gasification project credit is not allowed for

any qualified investment for which a qualifying advanced coal

project credit is allowed.

● Is carried out by an eligible entity (as defined in section

48B(c)(7), and

● The portion of the qualified investment does not exceed

$650,000,000 and is certified under section 48B(d).

Line 5. Credit From Section 1381(a) Cooperatives

Patrons, including cooperatives that are patrons in other

cooperatives, enter the unused investment credit allocated

from cooperatives. If you are a cooperative, see the

instructions for Form 3800, line 1a, for allocating the

investment credit to your patrons.

Line 3a

Enter the basis of any qualifying investment in integrated

gasification combined cycle property placed in service during

the tax year. Eligible property is any property which is part of

a qualifying advanced coal project using an integrated

gasification combined cycle and is necessary for the

gasification of coal, including any coal handling and gas

separation equipment.

A qualifying advanced coal project is a project:

● Using advanced coal-based generation technology (as

defined in section 48A(f)), and

● Part of a certified advanced coal project program (as

defined in sections 48A(d)(2) and 48A(e)).

Integrated gasification combined cycle is an electric

generation unit which produces electricity by converting coal

to synthesis gas, which in turn is used to fuel a

combined-cycle plant to produce electricity from both a

combustion turbine (including a combustion turbine/fuel cell

hybrid) and a steam turbine.

Line 3b

Enter the basis of any qualifying investment, other than in

line 3a, in an advanced coal project property service during

the tax year. Eligible property is any property which is part of

a qualifying advanced coal project (defined above) not using

an integrated gasification combined cycle.

Line 4

Enter the basis of the qualified investment in qualifying

gasification project property placed in service during the tax

year. For the purposes of this credit, eligible property

includes any property that is part of a qualifying gasification

project and necessary for the gasification technology of such

project. A qualifying gasification project is any project that:

● Employs gasification technology (as defined in section

48B(c)(2)),

Qualified investment for any tax year is the basis of eligible

property placed in service by the taxpayer during the tax

year which is part of the qualifying project. Eligible property

is limited to property for which depreciation or amortization is

available and the construction, reconstruction, or erection of

which is completed by the taxpayer, or which is acquired by

the taxpayer if the original use of such property commences

with the taxpayer.