FORM 3468 COMPUTATION OF INVESTMENT CREDIT—1965 TO BE ATTACHED

US. Treasury Department TO YOUR
Intemal Revenue Service | or taxable year beginning -.... == 1965, ending -... oe TAX RETURN

Name (as shown on page 1 of your tax return)

Address (number and street)

City or town, and State

1. Qualified investment in new or used property
NOTE: Include your share of investment in property by a partnership, estate, trust, small business corporation, or lessor.

Type of Line Lite? Deas ieabl) ified)
years Cost or basis Applicable percentage | Qualified investment
propery (column 2 x column 3)
4 or more but
©) less than 6 33%
NEW 6 of more but
property |” less than 8 66%
C) 8 or more 100
domoebr |e
USED (@) less than 6 3314
PROPERTY a
© 6 or more but oA
(for dollar less than 8
limitation see
instructions) 10) 8 or more 100

2. Total qualified investment—add lines 1(a) through (f).
3. Tentative investment credit—7 % of line 2 (for public utility property, enter 3% of line 2)

4, Carryback and carryover of unused credit(s) (attach statement) . -

5, TOTAL (line 3 plus line 4) .......... 002s eee e eee . : .
COMPUTATION OF TAX FOR PURPOSES OF LIMITATION
6. (a) Individuals (enter amount from line 12, page 1, Form 1040).........0seseeeeeeeeeeeeeeet teense nee

(b) Estates and trusts (enter amount from line 25 or 26, page 1, Form 1041)
(c) Corporations (enter amount from line 5, Tax Computation Schedule, Form 1120).

7. Individuals, estates and trusts:

Less: (a) Foreign tax credit... ....0.e see eeee eee eeneeeees oe
(b) Dividends received credit

(c) Retirement income credit.

(d) Total (add lines (a), (b), and (¢)).

8, Balance (line 6 less line 7(d)).

LIMITATION BASED ON AMOUNT OF TAX

(Married persons filing separately, affiliated groups, estates and trusts—see instructions)

9. (a) Enter amount on line 8 or $25,000, whichever is lesser... .
(b) If line 8 is in excess of $25,000, enter 25% of the excess.
© Total (add lines (a) and (b))

10. Investment credit (enter amount on line 5 or 9(c), whichever is lesser)

SCHEDULE A
If any part of your investment in 1 above was made by a partnership, estate, trust, small business corporation, or lessor complete the following:
Name Add Property
(Partnership, estate, trust, etc.) ress New Used Life years

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GENERAL INSTRUCTIONS

A. Who Must File.x—Any individual, estate, trust, or corpora-
tion claiming an investment credit against its tax must attach this
form to its income tax return. Partnerships and small business
corporations are not required to file this form because the credit is
claimed by the partner or shareholder. However, partnerships and
small business corporations must attach a statement to their returns
showing the allocation of investment to the portners or shareholders
by amount, type and life of property as shown in item 1 of this form.
Estates and trusts which apportion the investment between the estate
or trust and the beneficiaries should in addition to filing this form
attach a statement showing the allocation of the investment among
the beneficiaries.

B. When Allowed.—A credit is allowed against your tax for
investment in certain depreciable property having on estimated use-
ful life of 4 years or more. The credit is allowed for the first year
property is placed in service, even though under the depreciation
convention used you may not be able to claim a deduction for depre-
ciation on the property until the following. year.

C. Property Defined.—The investment credit is applicable to
(a) tangible personal property, (b) real property (except for build-
ings and their structural components) if used as an integral part of
manufacturing, production or extraction, or used asa research or
storage facility in connection with these activities, and (c) elevators
and escalators, if their construction, reconstruction, or erection is com-
pleted by the taxpayer after June 30, 1963, or if they are acquired
after June 30, 1963, and their original use commences with the tax-
payer and commences after such date.

The investment credit is not applicable to (1) certain property which
is used predominantly outside the United States; (2) property used for
lodging or in connection with furnishing lodging, except (a) property
used in certain commercial facilities located therein (such as a restau-
rant) or (b) property used by a hotel or motel; (3) property used by a
tax-exempt organization (other than in a business to which the unrelated
business income tax applies); (4) property used by governmental units;
(5) livestock (including racehorses).

D. Election for Leased Property.—A lessor may elect to
treat an investment in new property as if made by the lessee instead
of the lessor. If the lessor makes this election, then the lessee is

treated as if he had acquired the property (see section 48(d) for
determination of basis).

Where a lessor makes an election with respect to leased property,
such election must be made in accordance with section 48(d) and the
regulations thereunder.

E. Replacement Property.—Where insured property is lost or
destroyed as a result of a casualty or is stolen, reinvestment of the
insurance proceeds in replacement property may not be eligible for in-
vestment credit.

F. Disposition of Property.—Where property is disposed of
prior to the life used in computing the investment credit, the tax for
the year in which the property is so disposed of must be increased
by the difference between the credit taken on such property and the
credit which would have been allowed had the actual life been used.
Such increase should be reported on the line specified on returns other
than Form 1040. If you are filing Form 1040, add this amount to the
tax to be reported on line 14, page 1, and also show the increase as
@ separate amount identified as ‘Inv. Cr." to the left of the total tax.

G. Limitations With Respect to Certain Persons.—In the
case of (1) mutual savings banks, b
cooperative banks, (2) a regulated investment company or a real
estate investment trust subject to taxation under Subchapter M, and
(3) a cooperative organization described in section 1381(a), the
qualified investment and the $25,000 limitation shall equal such per-
son's ratable share of such items in accordance with section 46(d)(2).

H. Carryback and Carryover of Unused Credits.—If the
amount of the investment credit for any taxable year exceeds the
limitation, the excess shall be an investment credit carryback to each
of the 3 preceding taxable years and an investment credit carryover
to each of the 5 succeeding taxable years and shall be added to the
amount allowable as a credit for such years. A claim for refund
based upon an unused investment credit carryback should be made
‘on Form 843 or by filing an amended retum for the year to which the
unused credit is carried.

I. Basis and Cost.—The credit for new property applies to the
basis of the property. The credit for used property applies to the cost
of the property. The cost (of used property) does not include the basis
of any property traded in. No adjustment for additional first-year
depreciation or salvage value is requi

SPECIFIC INSTRUCTIONS

Line 1. New Property.—Enter the basis of property as de-
scribed in General Instructions C and | placed in service during
the taxable year. In the case of property constructed, reconstructed
or erected by you, enter only that portion of the basis which is properly
attributable to construction, reconstruction or erection after December
31, 1961,

Used Property.—Enter the cost (subject to dollar limitation below)
of used property placed in service during the taxable year. See
General Instruction | above,

Dollar Limitation on Used Property.—In general, the amount
of used property taken into account may not exceed $50,000. In
the case of a husband and wife filing separate retums, and each has
used property taken into account on their returns, the amount may
not exceed $25,000. In the case of a partnership, the $50,000
limitation shall apply with respect to the partnership and with respect
fo each partner. In the case of affiliated groups, the $50,000 limi-
tation shall be reduced for each member of the group by apportion
ing $50,000 among the members of such group in accordance with
their respective amounts of used property which may be taken into
‘account.

‘devestesk U.S, GOVERNMENT PRINTING OFFICE: 1955—O-780-690

Estates and Trusts.—In the case of an estate or trust the amount
of the investment is apportioned between the estate or trust and the
beneficiaries on the basis of the income of the estate or trust allocable
to each.

Line 6. Individuals and corporations filing forms other than Forms
1040 and 1120, use the tax figure shown on your return which is
comparable to the figure to be used by a taxpayer using Form 1040
or 1120.

Line 9. Limi in Based on Amount of Tax.—In the case
of a husband and wife filing separate returns and both have qualified
investments, the amount specified on lines 9(a) and (b) shall be
$12,500 instead of $25,000. In the case of affiliated groups, the
$25,000 specified on lines 9(a) and (b) shall be reduced for each
member of the group by apportioning the $25,000 among the mem-
bers of such group. In the case of an estate or trust the $25,000
limitation specified on lines 9(a) and (b) shall be reduced to an
amount which bears the same ratio to $25,000 as the amount of
qualified investment allocated to the estate or trust bears to the entire
qualified investment.

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