Form

Department of the Treasury

Internal Revenue Service

Renewable Electricity Production Credit OMB No. 1545-1362

© Attach to your return.

Attachment

Sequence No. 95

Current Year Credit

Electricity produced by closed-loop biomass facility placed in service after 1992:

1 Kilowatt hours produced and sold

2 Phaseout adjustment (see instructions)

3 Credit for electricity produced by closed-loop biomass facility. Subtract line 2 from line 1

Electricity produced by wind facility placed in service after 1993:

4 Kilowatt hours produced and sold (see instructions)

5 Phaseout adjustment (see instructions)

6 Credit for electricity produced by wind facility. Subtract line 5 from line 4

7 Total credit before reduction. Add lines 3 and 6

Reduction for government grants, subsidized financing, and other credits:

8 Total of government grants, proceeds of tax-exempt government obligations, subsidized energy

financing, and any other credits allowed for the project for this and all prior tax years

9 Total of additions to the capital account for the project for this and all prior tax years

10 Divide line 8 by line 9. Show as a decimal carried to 4 places

11 Multiply line 7 by line 10

12 Current year credit. Subtract line 11 from line 7

13 Renewable electricity

production credit(s)

from flow-through

entities:

If you are a— Then enter the credit(s) from—

a Shareholder Schedule K-1 (Form 1120S) lines 12d, 12e, or 13

b Partner Schedule K-1 (Form 1065) lines 13d, 13e, or 14

c Beneficiary Schedule K-1 (Form 1041) line 13

14 Total current year credit. Add lines 12 and 13

Part I

Part II

0.015

3

3

3

Tax Liability Limitation (See Who Must File Form 3800 to see if you complete Part II or file Form 3800.)

15a Individuals. Enter amount from Form 1040, line 40

b Corporations. Enter amount from Form 1120, Schedule J, line 3 (or Form 1120-A, Part I, line 1) 

c Other filers. Enter regular tax before credits from your return (see instructions)

16 Credits that reduce regular tax before the general business credit:

a Credit for child and dependent care expenses (Form 2441, line 10)

b Credit for the elderly or the disabled (Schedule R (Form 1040), line 21)

d Foreign tax credit (Form 1116, line 32, or Form 1118, Sch. B, line 12)

e Possessions tax credit (Form 5735)

c Mortgage interest credit (Form 8396, line 11)

g Credit for fuel from a nonconventional source

f Orphan drug credit (Form 6765, line 10)

h

Add lines 16a through 16h

17 Net regular tax. Subtract line 16i from line 15

18 Tentative minimum tax (see instructions):

a Individuals. Enter amount from Form 6251, line 26

b Corporations. Enter amount from Form 4626, line 13

c Estates and trusts. Enter amount from Form 1041, Schedule H, line 37

19 Net income tax:

a Individuals. Add line 17 above and line 28 of Form 6251 

b Corporations. Add line 17 above and line 15 of Form 4626

c Estates and trusts. Add line 17 above and line 39 of Form 1041, Schedule H

20 If line 17 is more than $25,000, enter 25% (.25) of the excess (see instructions)

21 Subtract line 18 or line 20, whichever is greater, from line 19. If less than zero, enter -0-

22 Renewable electricity production credit allowed for current year. Enter the smaller of line 14 or line 21.

This is your General Business Credit for 1994. Enter here and on Form 1040, line 44; Form 1120, Schedule

J, line 4e; Form 1120-A, Part I, line 2a; or on the appropriate line of other income tax returns

For Paperwork Reduction Act Notice, see instructions on page 2. Form 8835 (1994)

%

%

%

Cat. No. 14954R

Qualified electric vehicle credit (Form 8834, line 19)

i

8835

3

Name(s) shown on return Identifying number

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16a

16b

16c

16d

16e

16f

16g

16h

16i

17

18

19

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21

22

%

$

$

.

0.015
Form 8835 (1994) Page 2

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.

The time needed to complete and file this

form will vary depending on individual

circumstances. The estimated average time

is: Recordkeeping 9 hr., 34 min.; Learning

about the law or the form 6 min.; Preparing

and sending the form to the IRS 16 min.

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. You can

write to both the IRS and the Office of

Management and Budget at the addresses

listed in the instructions for the tax return

with which this form is filed.

General Instructions

Section references are to the Internal

Revenue Code unless otherwise noted.

Purpose of Form

The rate of the credit is 1.5 cents per kilowatt

hour (Kwh) on the sale of electricity produced

by the taxpayer from qualified energy

resources at a qualified facility during the

10-year period beginning with the date the

facility is originally placed in service.

The credit is proportionately phased out

over a 3-cent range when the reference price

(see Definitions) exceeds the adjusted

threshold price (see next paragraph).

Both the 1.5 cent credit rate and the 8 cent

threshold price are adjusted for inflation. The

reference price and the inflation adjustment

factor (IAF) for the calendar year are

published in the Federal Register by April 1.

The credit is also reduced for any

government grants, subsidized financing, and

other credits. See Line 8 below for details.

Who Must File Form 3800

The general business credit consists of the

following credits: investment, jobs, alcohol

used as fuel, research, low-income housing,

enhanced oil recovery, disabled access,

renewable electricity production, Indian

employment, employer social security and

Medicare taxes paid on certain employee

tips, and contributions to selected community

development corporations.

Definitions

Qualified energy resources means closed-loop

biomass and wind.

Closed-loop biomass means any organic

material from a plant that is planted

exclusively for use at a qualified facility to

produce electricity. It does not include any

waste materials such as the use of scrap

wood, manure, municipal or agricultural

waste, or standing timber.

Qualified facility means any taxpayer-owned

facility using closed-loop biomass to produce

electricity that is originally placed in service

after December 31, 1992, but before July 1,

1999. It also means any taxpayer-owned

facility using wind to produce electricity that

is originally placed in service after December

31, 1993, but before July 1, 1999 (see Rev.

Rul. 94-31, 1994-1 C.B. 16, for details).

Reference price means the annual average

contract price per kilowatt hour of electricity

generated from the same qualified energy

resource and sold in the previous year in the

United States as determined by the Secretary

of the Treasury.

United States and possessions of the

United States includes the seabed and

subsoil of those submarine areas that are

adjacent to the territorial waters over which

the United States has exclusive rights in

accordance with international law.

Specific Instructions

Complete lines 1 through 12 to figure any

renewable electricity production credit from

your trade or business. Skip lines 1 through

12 if you are claiming only a credit that was

allocated to you from an S corporation,

partnership, estate, or trust.

Line 8.—Enter the sum, for this and all prior

tax years, of (a) grants provided by the

United States, a state, or political subdivision

of a state for the project; (b) proceeds of an

issue of state or local government obligations

used to provide financing for the project, the

interest of which is tax-exempt; (c) total of

subsidized energy financing provided directly

or indirectly under a Federal, state, or local

program provided for the project; and (d) the

amount of any other credit allowable for any

property that is part of the project.

Line 9.—Enter the total amount of additions

to the capital account for the project for this

and all prior tax years.

Line 14.—

S corporations and partnerships.—Allocate

the line 14 credit to the shareholders or

partners. Attach Form 8835 to the S

corporation or partnership return, and show

on Schedule K-1 each shareholder’s or

partner’s credit.

Estates and trusts.—The line 14 credit is

allocated between the estate or trust and the

beneficiaries in proportion to the income

allocated to each. On the dotted line to the

left of the line 14 entry, enter the estate or

trust’s share of the credit. Label it “1041

PORTION” and use it in Part II (or Form 3800,

if required) to figure the credit to claim on

Form 1041.

Line 18.—Enter the tentative minimum tax

(TMT) figured on the appropriate alternative

minimum tax (AMT) form or schedule.

Although you may not owe AMT, you must

still compute the TMT to figure your credit.

Line 20.—See section 38(c)(3) for special

rules for married couples filing separate

returns, controlled groups, and estates and

trusts.

Line 22.—If you cannot use part of the credit

because of the tax liability limitations (line 22

is less than line 14), carry the excess to other

years. See the separate Instructions for Form

3800 for carryback restrictions and details.

How To Figure the Credit

Line 4.—Enter the Kwh of electricity

produced and sold during 1994 from a

qualified wind facility and multiply by $.015.

The $.015 rate will also apply to 1995 sales if

the 1995 IAF does not increase the rate. If

the 1995 IAF causes a rate increase, fiscal

year filers with 1995 sales must figure line 4

as explained under Fiscal year taxpayers.

For example, if the reference price is 9

cents and the IAF is 1, you must reduce the

credit by 1/3 ((9 cents minus 8 cents) divided

by 3 cents = 1/3 = .3333). In this example,

enter the line 1 credit in the first entry space

on line 2, .3333 in the second entry space,

and multiply to figure the reduction. This

example could also apply to line 5 of the

form.

The empowerment zone employment credit,

while a component of the general business

credit, is figured separately on Form 8844

and is never carried to Form 3800.

Printed on recycled paper

Use Form 8835 to claim the renewable

electricity production credit. The credit is part

of the general business credit under section

38 and is figured under section 45. The credit

is allowed for the sale of electricity produced

in the United States or U.S. possessions from

qualified energy resources (see Definitions).

If the reference price is less than the

threshold price of 8 cents (adjusted by the

IAF), there is no reduction. If the reference

price is more than 3 cents over 8 cents

(adjusted), there is no credit. If the reference

price is more than 8 cents (adjusted) but not

more than 3 cents above, there is a phaseout

adjustment on lines 2 and 5 of Form 8835.

See section 45(b) for details.

Note: For calendar year 1994, per Notice

94-43, 1994-1 C.B. 354, the IAF is 1.0273

and the reference price per Kwh is 0 cents for

closed-loop biomass facilities and 5.4 cents

for wind facilities. The 1995 IAF and reference

prices will be published by April 1, 1995.

Fiscal year taxpayers.—If you have sales in

1994 and 1995 and the credit rate on line 1

or 4 or phaseout adjustment on line 2 or 5 is

different for 1995, make separate

computations for each line. Use the

respective sales, credit rate, and phaseout

adjustment for each calendar year. Enter the

total of the two computations on lines 1 and

2 or lines 4 and 5. Attach the computations

to Form 8835 and write “FY” in the margin.

Line 1.—Enter the Kwh of electricity

produced and sold during 1994 from a facility

using closed-loop biomass as the renewable

resource and multiply by $.015. The $.015

rate will also apply to 1995 sales if the 1995

IAF does not increase the rate. If the 1995

IAF causes a rate increase, fiscal year filers

with 1995 sales must figure line 1 as

explained under Fiscal year taxpayers.

Line 2.—There is no phaseout adjustment for

calendar year 1994. Calendar year filers enter

-0- on line 2. Fiscal year filers with sales in

1995 also enter -0- if the published 1995

reference price is equal to or less than the

1995 adjusted threshold price. If the 1995

reference price exceeds the 1995 adjusted

threshold price, the phase out adjustment

applies for 1995 sales. See How To Figure

the Credit for figuring the adjustment.

If for this year you have more than one of the

credits included in the general business credit

listed below, a carryback or carryforward of

any of the credits, or a credit from a passive

activity, you must complete Form 3800,

General Business Credit, instead of

completing Part II of Form 8835 to figure the

tax liability limitation.

Line 5.—There is no phaseout adjustment for

calendar year 1994. Calendar year filers enter

-0- on line 5. Fiscal year filers with sales in

Line 15c.—Form 990-T filers, enter the total

of either lines 35c and 37 or lines 36 and 37,

whichever applies.

1995 also enter -0- if the published 1995

reference price is equal to or less than the

1995 adjusted threshold price. If the 1995

reference price exceeds the 1995 adjusted

threshold price, the phaseout adjustment

applies for 1995 sales. See How To Figure

the Credit for figuring the adjustment.