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 and before

2002 or poultry waste facility placed in service after 1999 and before 2002:

1 Kilowatt-hours produced and sold (see instructions)

2 Phaseout adjustment (see instructions)

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

Electricity produced by wind facility placed in service after 1993 and before 2002:

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 at least 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 pass-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 12c, 12d, or 13

c Beneficiary Schedule K-1 (Form 1041), line 14

14 Total current year credit. Add lines 12 and 13

Part I

0.017







For Paperwork Reduction Act Notice, see page 3. Cat. No. 14954R Form 8835 (2001)

8835



Name(s) shown on return Identifying number

1

2

3

4

5

6

7

8

9

10

11

12

13

14



$

$

0.017

Part II Tax Liability Limit (See Who Must File Form 3800 to find out if you complete Part II or file Form 3800.)

● Individuals. Enter the amount from Form 1040, line 40

15

Corporations. Enter the amount from Form 1120, Schedule J, line 3; Form 1120-A,

Part I, line 1; or the applicable line of your return

●

●

18a 18a

Credit for child and dependent care expenses (Form 2441, line 9) 18b

Credit for the elderly or the disabled (Schedule R (Form 1040), line 20)

b

18d

Foreign tax credit

d

e 18e

Possessions tax credit (Form 5735, line 17 or 27)

18f f

18g g

Credit for fuel from a nonconventional source

h

Qualified electric vehicle credit (Form 8834, line 20)

Add lines 18a through 18l 18m

Net income tax. Subtract line 18m from line 17. If zero, skip lines 20 through 23 and enter -0- on line 24 19

16 Alternative minimum tax (see instructions) 16

19

20 Tentative minimum tax (see instructions) 20

22 Enter 25% (.25) of the excess, if any, of line 21 over $25,000 (see instructions)

Subtract line 23 from line 19. If zero or less, enter -0-

23 23

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

24 here and on Form 1040, line 50; Form 1120, Schedule J, line 6d; Form 1120-A, Part I, line

4a; Form 1041, Schedule G, line 2c; or the applicable line of your return 25

Mortgage interest credit (Form 8396, line 11)

c 18c

15 Regular tax before credits:

17 Add lines 15 and 16 17

21

Enter the greater of line 20 or line 22

21

22

i

Adoption credit (Form 8839, line 14) 18h

District of Columbia first-time homebuyer credit (Form 8859, line 11) 18i

j

k

l

Child tax credit (Form 1040, line 48)

Education credits (Form 8863, line 18)

18j

18k

Estates and trusts. Enter the sum of the amounts from Form 1041, Schedule G, lines 1a

and 1b, or the amount from the applicable line of your return

Net regular tax. Subtract line 18m from line 15. If zero or less, enter -0-

24 24



25

2001

.

18l

Rate reduction credit (Form 1040, line 47)

m
Form 8835 (2001) Page 2

Section references are to the Internal Revenue Code.

Purpose of Form

Qualified energy resources means closed-loop biomass,

poultry waste, and wind.

Closed-loop biomass means the use of any organic material

from a plant that is planted exclusively for use at a qualified

facility to produce electricity. It does not include the use of

any waste materials (such as scrap wood, manure, or

municipal or agricultural waste) or standing timber.

Qualified facility means:

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 U.S. possessions include the seabed

and subsoil of those submarine areas that are adjacent to

the territorial waters over which the United States has

exclusive rights according to international law.

Specific Instructions

Figure any renewable electricity production credit from your

trade or business on lines 1 through 12. 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.

How To Figure the Credit

Line 4

Use Form 8835 to claim the renewable electricity production

credit. The credit is allowed only for the sale of electricity

produced in the United States or U.S. possessions from

qualified energy resources at a qualified facility (see

Definitions below).

Fiscal year taxpayers. If you have sales in 2001 and 2002

and the credit rate on line 1 or 4 or the phaseout adjustment

on line 2 or 5 is different for 2002, 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

Line 2

The credit is 1.5 cents per kilowatt-hour (kWh) for the sale of

electricity produced by the taxpayer from qualified energy

resources at a qualified facility during the credit period (see

Definitions below).

The credit is proportionately phased out over a 3-cent

range when the reference price (see Definitions below)

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 each year.

If the reference price is less than the threshold price

(adjusted by the IAF), there is no reduction. If the reference

price is more than 3 cents over the adjusted threshold price,

there is no credit. If the reference price is more than the

threshold price, but not more than 3 cents above the

adjusted threshold price, there is a phaseout adjustment on

lines 2 and 5 of Form 8835.

The credit is also reduced for any government grants,

subsidized financing, and other credits. See Line 8 below for

details.

Note: For calendar year 2001, per Notice 2001-33, 2001-19

I.R.B. 1155, the IAF is 1.1641 and the reference price per

kWh is 0 cents for facilities producing electricity from

closed-loop biomass or poultry waste energy resources and

is 2.57 cents for facilities producing electricity from wind

energy resources. Therefore, the credit is 1.7 cents per kWh

(1.5 x 1.1641 rounded to the nearest .1 cent) and the

adjusted threshold price is increased to 9.3 cents (8 x 1.1641

rounded to the nearest .1 cent).

Credit period means the 10-year period beginning with the

date the facility is placed in service.

Example. If the reference price is 10.0¢ and the adjusted

threshold price is 9.0¢, reduce the credit by 1/3 ((10.0¢ –

9.0¢) ÷ 3¢ = 1⁄3 = .3333). 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 also applies to line 5 of

the form.

Definitions

General Instructions

Poultry waste means poultry manure and litter, including

wood shavings, straw, rice hulls, and other bedding material

for the disposition of manure.

● Any taxpayer-owned facility originally placed in service

after 1992 and before 2002 that uses closed-loop biomass to

produce electricity;

● Any taxpayer-owned facility originally placed in service

after 1993 and before 2002 that uses wind to produce

electricity (see Rev. Rul. 94-31, 1994-1 C.B. 16, for details);

or

● Any facility of the taxpayer originally placed in service after

1999 and before 2002 that uses poultry waste to produce

electricity. If a governmental unit owns the facility, the lessor

or operator of the facility is eligible for the credit.

Line 5

Enter the kilowatt-hours of electricity produced and sold

during 2001 from a facility using closed-loop biomass or

poultry waste as the renewable resource and multiply by

$.017. The $.017 rate will also apply to 2002 sales if the

2002 IAF is less than 1.1667. If the 2002 IAF causes a rate

increase, fiscal year filers with 2002 sales must figure line 1

as explained under Fiscal year taxpayers above.

There is no phaseout adjustment for calendar year 2001.

Calendar year filers enter zero on line 2. Fiscal year filers

with sales in 2002 also enter zero if the published 2002

reference price is equal to or less than the 2002 adjusted

threshold price. If the 2002 reference price exceeds the 2002

adjusted threshold price, the phaseout adjustment applies for

2002 sales. See How To Figure the Credit to figure the

adjustment.

Enter the kilowatt-hours of electricity produced and sold

during 2001 that qualify for the credit from a qualified wind

facility and multiply by $.017. The $.017 rate will also apply

to 2002 sales if the 2002 IAF is less than 1.1667. If the 2002

IAF causes a rate increase, fiscal year filers with 2002 sales

must figure line 4 as explained under Fiscal year taxpayers

above. Generally, no credit is allowed for electricity produced

at a qualified wind facility placed in service after June 30,

1999, and sold to a utility under a contract originally entered

into before 1987 (whether or not the contract was amended

after 1986). See section 45(d)(7) for exceptions and more

details.

There is no phaseout adjustment for calendar year 2001.

Calendar year filers enter zero on line 5. Fiscal year filers

with sales in 2002 also enter zero if the published 2002

reference price is equal to or less than the 2002 adjusted

threshold price. If the 2002 reference price exceeds the 2002
Form 8835 (2001) Page 3

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.

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.

Who Must File Form 3800

The general business credit consists of the following

credits.

Line 20

Line 22

Line 25

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.

If for this year you have more than one of the credits

included in the general business credit, a carryback or

carryforward of any of these credits, a credit from a passive

activity, or general credits from an electing large partnership,

you must complete Form 3800, General Business Credit,

instead of completing Part II of Form 8835 to figure the tax

liability limit.

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.

● Individuals: Form 6251, line 26.

● Corporations: Form 4626, line 13.

● Estates and trusts: Form 1041, Schedule I, line 37.

Line 8

Line 9

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 on Form 3800,

if required) to figure the credit to claim on Form 1041.

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. Electing large

partnerships, include this credit in “general credits.”

● Grants provided by the United States, a state, or political

subdivision of a state for the project;

● Proceeds of an issue of state or local government

obligations used to provide financing for the project, the

interest of which is tax-exempt;

● Total of subsidized energy financing provided directly or

indirectly under a Federal, state, or local program provided

for the project; and

● The amount of any other credit allowable for any property

that is part of the project.

Recordkeeping 11 hr., 28 min.

Learning about the law

or the form 24 min.

Preparing and sending

the form to the IRS 36 min.

● Investment (Form 3468).

● Work opportunity (Form 5884).

● Alcohol used as fuel (Form 6478).

● Research (Form 6765).

● Low-income housing (Form 8586).

● Enhanced oil recovery (Form 8830).

● Renewable electricity production (Form 8835).

● Indian employment (Form 8845).

● Employer social security and Medicare taxes paid on

certain employee tips (Form 8846).

● Contributions to selected community development

corporations (Form 8847).

● Disabled access (Form 8826).

● Trans-Alaska pipeline liability fund.

● Orphan drug (Form 8820).

● Welfare-to-work (Form 8861).

The time needed to complete and file this form will vary

depending on individual circumstances. The estimated

average time is:

Line 16

● Individuals: Form 6251, line 28.

● Corporations: Form 4626, line 15.

● Estates and trusts: Form 1041, Schedule I, line 39.

Enter the sum, for this and all prior tax years, of:

Enter the total amount of additions to the capital account for

the project for this and all prior tax years.

Pass-through entities should report the amount on line 14 as

follows.

Enter the alternative minimum tax (AMT) from the following line

of the appropriate form or schedule.

Although you may not owe AMT, you generally must still

compute the tentative minimum tax (TMT) to figure your

credit. For a small corporation exempt from the AMT under

section 55(e), enter zero. Otherwise, complete and attach the

applicable AMT form or schedule. Enter on line 20 the TMT

from the line shown below.

See section 38(c)(3) for special rules that apply to married

couples filing separate returns, controlled groups, regulated

investment companies, real estate investment trusts, and

estates and trusts.

If you cannot use part of the credit because of the tax

liability limit (line 24 is less than line 14), carry the excess

back 1 year then forward for up to 20 years. See the

Instructions for Form 3800 for details.

adjusted threshold price, the phaseout adjustment applies for

2002 sales. See How To Figure the Credit to figure the

adjustment.

● New markets (Form 8874).