Form 4255 Recapture of Investment Credit OMB No. 1545-0166

(Rev. Nov. 1981) Including Eni i i
(Ree Noy ee) uy (Including Energy Investment Credit) Expires 11-30-83
Internal Revenue Service > Attach to your income tax return

> Attach separate schedules for recapture of investment credit from disposed qualified progress expenditure property and property
ceasing to be at risk (see instructions for lines 13a and 13b).

Name Identifying number as shown on page 1 of your tax return
Properties Kind of property (State whether recovery or nonrecovery. If energy property, show type of property. Indicate if
rehabilitation expenditure property.)
A
B
c
D
E
Properties
Computation Steps: A B c D E

1 Original rate of credit. . . .
2 Date property was placed in

service. . 2 6 ee ew ee
=
'B] 3 Cost or other basis. . . . .
©} 4 Original estimated useful life or
2 A
5 class of property (see instruc-
= tims). 2... eee ee
3B
3
E] 5 Applicable percentage. . . .
| 6 Original qualified investment
a4 (line 3timesline5). . . . e
$s 7 Original credit (line 1 times line

)
8 Date property ceased to be invest-
ment credit property (see instruc-
tions) . 2. 6 we ee
9 Number of full years between the
date on line 2 arfd the date on line
8

10 Recapture percentage (see in-
structions) . . 2. ee ee
11 Tentative recapture tax—Line 7
timeslinel0. . . 2 ee

12 Add line 11, columns A through FE. - 2 2 6 2 ee ee ee ee ee ee
13 a Enter tax from disposed qualified progress expenditure property (attach separate computation). . .
b Enter tax from any part of property ceasing to be at risk (attach separate computation). . . . -

14 Total—Add lines 12,13aand13b . 1 6 ee ee eee ee ee ee ee ee

Computation of Recapture Tax

15 Unused credit—Do not enter more than line 14 (see instructions). . . 2. 2 2 1 ee ew ee

16 Total increase in tax—Subtract line 15 from line 14. Enter here and on the proper line of your tax return, Do
not use this amount to reduce current year's investment credit figured on Form 3468, Computation of In-
vestment Credit. Any unused credit on line 15 cannot be used in any year as a carryback or carryover. .

For Paperwork Reduction Act Notice, see instructions on back. 343-278-1 Form 4255 (Rev. 11-81)



General Instructions

References are to the Internal Revenue
Code.

Paperwork Reduction Act Notice.—The
Paperwork Reduction Act of 1980 says we
must tell you why we are collecting this in-
formation, how we will use it, and whether
you have to give it to us. We ask for the
information to carry out the Internal Rev
nue laws of the United States. We need
to ensure that you are complying with
these laws and to allow us to figure and
collect the right amount of tax. You are re-
quired to give us this information.

Purpose.—Use Form 4255 to figure the
increase in tax for the recapture of invest-
ment credit for regular and energy prop-
erty. You must refigure the credit if you
took it in an earlier year, but later dis-
posed of the property before the end of
the recapture period for recovery property
or of the useful life you used to figure the
original credit for nonrecovery property.
You must also refigure the credit if you
changed the use of the property so that
it no longer qualified as regular or energy
investment credit property. Also, see in-
structions for line 13b regarding recapture
if property ceases to be at risk. For more
information, see Publication 572, Invest-
ment Credit.

If property on which you took both the
regular and energy investment credit
ceases to be energy credit property, but
still qualifies as regular investment credit
Property, you need only refigure the energy
investment credit. However, if you took
both credits, and you dispose of the prop-
erty, or the property ceases to be both
energy and regular investment credit prop-
erty, you must refigure both credits.

If you are a subchapter S corporation,
a partnership, or an estate or trust that
shared the investment credit among the
estate or trust and the beneficiaries, you
must give your shareholders, partners, or
beneficiaries the information they need to
refigure the credit. See regulations sec-
tions 1.47-4, 1.47-5 and 1.47-6.

Special rules.—If you took the credit on
the following kinds of property, see the
sections listed below before you complete
Form 4255:

Property IRC section
Motion picture films and video tape . . 47(a)(8)
Ships . . eee 46(8)(4)
Commuter highway Vehicles: 2 2 1 1 a7c@ycay

If you dispose of property and you
had elected the basic or basic and match-
ing employee plan percentage for contribu-
tions to tax credit employee stock option
plans, see section 48(n)(4).

If you took an investment credit on rail-
road property, and then transferred the
property to Conrail after March 31, 1976,
you do not have to refigure the credit.

If you took any credit for production of
fuel from nonconventional sources, see
section 44D(b)(4).

Specific Instructions

Note: Do not figure the recapture tax for
qualified progress expenditure property or
for property ceasing to be at risk on lines
1 through 12. Figure the recapture tax for
these properties on separate schedules and
enter the recapture tax on lines 13a and
13b. Enter any unused credit for these
properties on line 15.

Lines A through E.—Describe the prop-
erty for which you must refigure the

credit for regular or energy investment
credit. For energy property, show type or
kind of property. Also, indicate if property
is rehabilitation expenditure property.

Fill in lines 1 through 11 for each prop-
erty on which you are refiguring the credit.
Use a separate column for each item. If
you must recapture both the energy in-
vestment credit and the regular invest-
ment credit for the sami im, use a sepa-
rate column for each credit. ‘if you need
more columns, use additional Forms 4255,
or other schedules with all the information
shown on Form 4255. Enter the total from
the separate sheets on line 12.

Line 1.—Enter the rate you used to
figure the original credit as determined
from the table below:

Regular Investment Property:

Public utility property ordered after March 31,
1971, or acquired after August 15, 1971, and
before January 22, 1975 . 4%
Property acquired or constructed | before Janu:
ary 22, 1975. M%
Property (including public “utility property)
acquired or constructed and placed in service

after January 21,1975. . . . . « « «10%
(The part constructed before January 22, 1975,
is at the 7% (or 4%) rate, even if placed in
service after that date.)

See section 46(a)(2)(F) for the allowed
percentage rates for qualified rehabilita-
tion expenditures made after December

1,
Energy Investment Property:

Alternative energy property, specially defined
energy property, recycling equipment, shale

oil equipment, equipment for producing nat-

ural gas from geopressured brine, cogenera-

tion equipment, and intercity buses . . . 10%
Qualified hydroelectric generating equipment . 119
Solar and wind Saulpment acquired or con-
structed before 1/1/80 . . . .

Solar and wind equipment, ocean thermal
equipment, and geothermal equipment ac-
quired or constructed after 12/31/79. . . 15%

Line 2.—For nonrecovery property, enter
the first day of the first month and the year
that the property was available for serv-
ice. For recovery property, enter the date
the property was placed in service.

Line 3.—Enter the cost or other basis
of nonrecovery property (unadjusted basis
of recovery property) that you used to fig-
ure the original credit.

Line 4.—Enter the estimated useful
life that you used to figure the original
credit for nonrecovery property. Enter the
class of property for recovery property.

Line 5.—Enter the applicable percent-
age that you used to figure the original
qualified investment from the tables below:

Nonrecovery Property

Original estimated Applicable
useful life: percentage
3 or more but less than 5 years. . . . 3314%
5 or more but less than 7 years. . . . 66%4%
7 or more years. . . » ~~ - - - 100%
Recovery Property
Class of Applicable
property percentage
Byer. ee ee ee ee we + 60%
Other 2... ee ae 100%

Line 6.—Multiply line 3 by line 5 to
get the original qualified investment.

Line 7.—Multiply line 6 by the rate on
line 1 to get the original investment credit.

‘tk US. GOVERNMENT PRINTING OFFICE : 1981—~O-343-278

Line 8.—Enter the date the property
ceased to be qualified property. See regu-
lations. section 1.47-1(c) for more infor-
mation.

Line 9.—Enter the number of full years
between the date on line 2 and the date on
line 8. Do not enter partial years. If prop-
erty was held less than 12 months, enter
zero.

Line 10.—Enter the recapture percent-
age from the following tables,

Nonrecovery Property

If number of full

The recapture percentage
ears on line 9 of

for property with an origi

‘orm 4255 ist nal useful life of
301 Sor Jor
more but more but more
less than less than years is
5 years is 7 years is
0 100 100 100
1 100 100 100
2 100 100 100
3 0 50 66.6
4 0 50 66.6
5 Oo ie) 33.3
6 i) [°) 33.3
Recovery Property
If number of full | The recapture percentage
years on line 9 of | for:
Form 4255 is:
3-year 15-year,
property is 10-year, and
year
property is
O 100 100
1 66 80
2 33 60
3 Oo 40
4 0 20
Line 12.—Add line 11, columns A
through E. If you have used more than

one Form 4255, or separate sheets
to list additional items on which you fig-
ured an increase in tax, write on the dotted
line “Tax from attached $.

clude the amount in the total for line 1B

Line 13a.—See section 47(a)(3) for
information on recapturing investment
credit on the disposal of qualified progress
expenditure property. Attach a separate
computation schedule and enter the recap-
ture tax on line 13a.

Line 13b.—For certain taxpayers, the
basis or cost of property placed in service
after February 18, 1981, is limited to the
amount the taxpayer is at risk for the prop-
erty at year end. If property ceases to be at
risk in a later year, recapture may be re-
quired. See section 47(d) for details. At-
tach a separate computation schedule to
figure the recapture tax and enter the total
tax on line 13b.

Line 15.—If you did not use all the
credit you originally figured, either in the
year you figured the credit or in a carry-
back or carryover year, you have an un-
used credit. You must also take into ac-
count the current year’s unused credit in
figuring the increase in tax. See regula-
tions section. 1.47—-1(d), Revenue Ruling
72-221, and Publication 572 for more in-
formation.

Figure the unused credit on a separate
sheet and enter the total unused credit on
this line. Do not enter more than the re-
capture tax on line 14.

Line 16.—Subtract line 15 from line 14.
This is the total increase in tax. Enter it on
the proper line of your tax return. Do
not use this amount to reduce your cur-
rent year’s investment credit from Form
3468, Computation of Investment Credit.

343-278-1