OMB No. 1545-0155 Investment Credit

Form 3468

Department of the Treasury  Attach to your tax return.

Internal Revenue Service

Attachment

Sequence No. 52

Name(s) shown on return Identifying number

Current Year Credit

1b

1

c

Energy credit. Enter the basis of energy property placed in

service during the tax year (see instructions)

2

2

4 4

5

Allowable Credit (See Who must file Form 3800 to find out if you complete Part II or file Form 3800.)

For Paperwork Reduction Act Notice, see page 4. Form 3468 (2002)

Part I

Part II

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

b Pre-1936 buildings × 10% (.10)

Certified historic structures × 20% (.20)

3

× 10% (.10)

Reforestation credit. Enter the amortizable basis of qualified

timber property acquired during the tax year (see instructions) × 10% (.10)

Credit from cooperatives. Enter the unused investment credit from cooperatives

5 Total current year investment credit. Add lines 1b through 4

1c

3

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:

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

6

f

Foreign tax credit 9a

Credit for child and dependent care expenses (Form 2441, line 11) 9b

9a

9d

Child tax credit (Form 1040, line 50)

c

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

9f

g 9g

d

Credit for fuel from a nonconventional source

i

Qualified electric vehicle credit (Form 8834, line 20)

Add lines 9a through 9l 9m

Net income tax. Subtract line 9m from line 8. If zero, skip lines 11 through 14 and enter -0- on line 15 10

7 Alternative minimum tax (see instructions) 7

10

Tentative minimum tax (see instructions)

11

13

12 Enter 25% (.25) of the excess, if any, of line 11 over $25,000 (see instructions)

Subtract line 14 from line 10. If zero or less, enter -0-

14 14

Investment credit allowed for the current year. Enter the smaller of line 5 or line 15 here and

on Form 1040, line 53; Form 1120, Schedule J, line 6d; Form 1120-A, Part I, line 2a; Form 1041,

Schedule G, line 2c; or the applicable line of your return. If line 15 is smaller than line 5, see

instructions 16

Education credits (Form 8863, line 18)

b

9c

6 Regular tax before credits (see instructions)

8 Add lines 6 and 7 8

11

Enter the greater of line 12 or line 13

12

13

e

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

9h

9i

Credit for qualified retirement savings contributions (Form 8880, line 14)

j

k

l

Mortgage interest credit (Form 8396, line 11)

Adoption credit (Form 8839, line 18)

9j

9k

Net regular tax. Subtract line 9m from line 6. If zero or less, enter -0-

15 15

16

(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 1d(1) above

$

$

(1)

(2)

(1)

(2)

(3)

d

/ /

/ /

$

$

and ends

$

$

/ /

9e

h

Credit for the elderly or the disabled (Schedule R (Form 1040), line 24)

9l

m

2002
Form 3468 (2002) 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, and reforestation

credits. Also use Form 3468 to claim a

regular investment credit for transition

property.

Investment Credit Property

Investment credit property is any

depreciable or amortizable property that

qualifies for the rehabilitation, energy, or

reforestation credit. For details on the

rehabilitation credit, see the instructions for

lines 1a through 1e. For details on the

energy credit, see the instructions for line

2. For details on the reforestation credit,

see the instructions for line 3.

You cannot claim a credit for property

that is:

1. Used mainly outside the United States

(except for property described in section

168(g)(4)),

2. 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),

3. 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, or

4. Used for lodging or in the furnishing of

lodging (see section 50(b)(2) for

exceptions).

Transition Property

Property of certain taxpayers specified in

sections 204(a)(8), 204(a)(12), and 204(c)(4)

of the Tax Reform Act of 1986 (TRA) may

be eligible for the regular investment credit

under the transitional rules of section 49

(as in effect on November 4, 1990). Also,

certain projects specified in TRA sections

251(d)(3) and (4) may be eligible for the

rehabilitation credit under the transitional

rules of TRA section 251(d)(5). For property

that qualifies under the transitional rules,

do not use lines 1 through 4. Instead,

attach a statement that shows how you

figured the allowable credit. Include the

credit on line 5 of Form 3468 and, on the

dotted line to the left of line 5, write "TRA"

and the section number that lists your

property as qualifying for the credit. If you

are claiming the rehabilitation credit, see

the instructions for lines 1a through 1e for

other information that must be attached.

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).

At-Risk Limit for Individuals

and Closely Held

Corporations

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 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.

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,

● Any property to which section 48(a)(5)

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,

● 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.

Note: 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.

Specific Instructions

S Corporations, Partnerships

(Other Than Electing Large

Partnerships), Estates, and

Trusts

To figure the cost or basis of property to

pass through to the individual

shareholders, partners, or beneficiaries,

complete only the following.

● The information requested on lines 1b,

1c, and 1d (or the attached statement for

line 5).

● The basis of energy property on line 2.

● The amortizable basis of qualified timber

property on line 3.

● The qualified investment for transitional

regular investment credit property on the

attached statement for line 5.

Attach the form (with applicable lines of

Part I completed) to the S corporation,

partnership, estate, or trust income tax

return to show the total cost or basis (or

unused credit from a cooperative) that is

passed through.
Form 3468 (2002) Page 3

Regulated Investment

Companies and Real Estate

Investment Trusts

For regulated investment companies and

real estate investment trusts, the following

amounts are limited to a percentage of the

amounts otherwise determined.

● The qualified rehabilitation expenditures

on lines 1b and 1c (or the attached

statement for line 5).

● The basis of energy property on line 2.

● The amortizable basis of qualified timber

property on line 3.

● The qualified investment for transitional

regular investment credit property on the

attached statement for line 5.

● The $25,000 amount used to figure the

tax limitation on line 12.

Figure this percentage by dividing

taxable income for the year by taxable

income figured without regard to the

deduction for dividends paid. For details,

see Regulations section 1.46-4(b).

Part I—Current Year Credit

Lines 1a through 1e—Rehabilitation 

Credit

You are allowed a credit for qualified

rehabilitation expenditures made for any

qualified rehabilitated building. The credit is

10% of the expenditures for any qualified

rehabilitated building other than

a certified historic structure and 20% of the

expenditures for a certified historic

structure. You must reduce your

depreciable basis by the amount of the

credit.

To be a qualified rehabilitated building,

your building must meet all four of the

following requirements.

1. The building was originally placed in

service before 1936 or 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 10-168,

Historic Preservation Certification

Application.

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.”

3. 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.

4. 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.

To be qualified rehabilitation expenditures,

your expenditures must meet all six of the

following requirements.

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 121⁄2 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.

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 1c, enter the

assigned NPS project number on line 1c(1).

If the qualified rehabilitation expenditures

are from an S corporation, partnership,

estate, or trust, enter the employer

identification number of the pass-through

entity instead of the assigned NPS project

number.

Enter the date of the final certification of

completed work received from the

Secretary of the Interior on line 1c(2). 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 proof that it was

received by the Department of the Interior

or the State Historic Preservation Officer,

together with evidence 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.

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.

Line 2—Energy Credit

Enter the basis of energy property placed

in service during the tax year. Energy

property is:

1. Equipment that uses solar energy to

generate electricity, to heat or cool (or

provide hot water for use in) a structure, or

to provide solar process heat or

2. Equipment used 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.

To qualify, the 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).
Form 3468 (2002) Page 4

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 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 (i.e., 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.

You must reduce the depreciable basis

by 50% of the energy credit determined.

Line 3—Reforestation Credit

Enter the portion of the amortizable basis

of any qualified timber property that was

acquired during the tax year and is taken

into account under section 194. Only direct

costs for planting and seeding can be

amortized. These include costs for site

preparation, seed, seedlings, labor, tools,

and depreciation on equipment such as

tractors, trucks, and tree planters used in

planting or seeding. Depreciation is a direct

cost only for the period of time the

equipment is used in these activities.

You cannot claim more than $10,000 (or

$5,000 if married filing separately) of

amortizable basis acquired during the tax

year. For details, see Regulations sections

1.194-2 and 1.48-1(p).

Line 4—Credit From Cooperatives

Section 1381(a) cooperative organizations

may claim the investment credit. If the

cooperative cannot use any of the credit

because of the tax liability limit, the unused

credit must be allocated to the patrons of

the cooperative. The recapture provisions

of section 50 apply as if the cooperative

had kept the credit and not allocated it.

Patrons should enter their unused

investment credit from cooperatives.

Who must file Form 3800. You must file

Form 3800 if you have:

● An investment credit from a passive

activity,

C corporations that are required to file

Form 4626, Alternative Minimum Tax—

Corporations, may also use Schedule A of

Form 3800 to determine if they are entitled

to an additional general business credit for

any regular investment credit carryforward

to 2002 for property placed in service

before January 1, 1991, under section

38(c)(2) (as in effect on November 4, 1990).

Line 6—Regular Tax

Enter the regular tax before credits from

the appropriate form or schedule.

● Individuals: Form 1040, line 42.

● Corporations: Form 1120, Schedule J,

line 3; Form 1120-A, Part I, line 1; or the

applicable line of your tax return.

● Estates and trusts: The sum of the

amounts from Form 1041, Schedule G,

lines 1a and 1b, or the amount from the

applicable line of your tax return.

Line 7—Alternative Minimum Tax

Enter the alternative minimum tax (AMT)

from the following line of the appropriate

form or schedule.

Part II—Allowable Credit

The credit allowed for the current year may

be limited based on your tax liability. Use

Part II to figure the allowable credit unless

you must file Form 3800, General Business

Credit.

● More than one credit included in the

general business credit (other than a credit

from Form 8844 or 8884), or

● A carryback or carryforward of any of

those credits.

See the instructions for Form 3800 for

credits included in the general business

credit.

● Individuals: Form 6251, line 35.

● Corporations: Form 4626, line 15.

● Estates and trusts: Form 1041, Schedule

I, line 56.

Line 13—Tentative Minimum Tax

Although you may not owe AMT, you

generally must still compute the tentative

minimum tax (TMT) to figure your credit.

● Individuals: Form 6251, line 33.

● Corporations: Form 4626, line 13.

● Estates and trusts: Form 1041, Schedule

I, line 54.

Line 12

If a husband and wife file separate returns,

each must use $12,500 instead of $25,000.

But if one of them has no general business

credits (and no carryforwards or carrybacks

to the current year), then the other may use

the entire $25,000.

A member of a controlled group must

use only its apportioned share of the

$25,000.

A regulated investment company or a

real estate investment trust should see

Regulated Investment Companies and

Real Estate Investment Trusts on page 3.

For estates and trusts, the $25,000

amount is reduced by the same

proportionate share of income that was

allocated to the beneficiaries.

Line 16—Current year credit

If you cannot use all of the credit because

of the tax liability limit (line 15 is smaller

than line 5), carry the unused credit back 1

year and then forward up to 20 years. See

the instructions for Form 3800 for details.

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.

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.

The time needed to complete and file

this form will vary depending on individual

circumstances. The estimated average time

is: Recordkeeping, 12 hr., 54 min.;

Learning about the law or the form, 3 hr.,

34 min.; Preparing and sending the form

to the IRS, 3 hr., 57 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. See the

instructions for the tax return with which

this form is filed.

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 13 the TMT from the line shown below.

You must reduce the amortizable basis

by 50% of the reforestation credit

determined.