rom 3468 | COMPUTATION OF INVESTMENT CREDIT—1962 TO BE ATTACHED

USS. Treasury Department | TO YOUR
Internal Revenue Service | or taxable year beginning --- =, 1962, ending... “19 TAX RETURN
Name (as shown on page 1 of your tax return) Your social security number (if other

than individual, give employer iden-
— — | tification number)

Address (number and street)

City or town, postal zone number, State

. Qualified investment in new or used property

__NOTE: Include your share of investment in property by partnerships, estates, trusts or small bus

1ess corporations,

Type of Li | Lite Cost or b Applicable percent Qualified Pivestment
ine ife years ‘ost or basis pplicable percentage walified investmen
Property | | Column 2 x column 3)
(a) 4106 | 33Y3
NEW |
(b) 6108 | 66%
PROPERTY | __
© 8 or more 100
USED aC) 4106 33V
PROPERTY |
(e) 6108 | 66%
(for dollar | - | cee
limitation see |
instructions) | 0) 8 or more | 100 |

n

Total qualified investment—add lines 1(a) through (f). . eee fesse ee

»

Tentative investment credit—7 % of line 2 (for public utility property, enter 3% of line 2) . a ee

COMPUTATION OF TAX FOR PURPOSES OF LIMITATION

(a) Individuals (enter amount from line 12, page 1, Form 1040)

~

(b) Estates and trusts (enter amount from line 25 or 26, page 1, Form 1041)

(c) Corporations (enter amount from line 7, Tax Computation Schedule, Form 1120).

a

Individuals, estates and trusts; ren ~
Less: (a) Foreign tax credit.... bocce nl ee
(b) Dividend received credit
(c) Partially tax exempt interest credit .

(d) Retirement income credit see sees - ——

(e) Total (add lines (a), (6), (c) and (d))

Balance (line 4 less line 5(e))...... . veces . cece wee

LIMITATION BASED ON AMOUNT OF TAX

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

a

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|. (a) Enter amount on line 6 or $25,000, whichever is lesser .
(b) If line 6 is in excess of $25,000, enter 25% of the excess... .
(c) Total (add lines (a) and (b))

._ Investment credit (enter amount on line 3 or 7(c), whichever is lesser)

— SCHEDULE A

If any part of the investment in 1 above was made by a partnership, estate, trust, small business corporation, or lessor complete the following:

©

Pr i
Address a Tre

Name
(Partnership, estate, trust, etc.) New Used Life years

(5016-771 78-1


GENERAL INSTRUCTIONS

A. Who Must File.—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 reauired to file this form because the credit is
claimed by the partner or shareholder. However, partnerships and
small business corporations should 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, Effective Date.—For taxable years ending after December 31,
1961, a credit is allowed against your tax for investment in certain
depreciable property, acquired after December 31, 1961, having an
estimated useful life of 4 years or more. The credit is allowed for
the first year property is placed in service, even though under the de-
preciation convention used you may not be able to claim a deduction
for depreciation on the property until the following year.

C. Property Defined.—The investment credit is applicable to
(a) tangible personal property and (b) real property (except for build-
ings and their structural components) if used as an integral part of manu-
facturing, production or extraction, or used as a research or storage
facility in connection with these activities.

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 for the lessor's cost or
other basis or the fair market value of the property if it was constructed
by the lessor. Where the lessee is allowed the investment credit there
is no adjustment of the lessor’s basis for depreciation (see K below)
but a reduction of the lessee’s deduction for rent must be made.

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
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.

G. Limitations With Respect to Certain Persons.—In the
case of (1) mutual savings banks, building and loan associations and
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.

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. However, such excess
may be a carryback only to a taxable year ending after December
31, 1961.

The amount which may be carried to this year and added to line 8
is limited to the excess of line 7(c) over line 3.

|. Deduction for Certain Unused Investment Cred If
after applying the carryback and caryover provisions the unused
credit has not been completely absorbed, the balance may be allowed
as a deduction in the first taxable year following the last taxable year
in which it could have been used as a credit except for the limitations.

J. 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.

K. Adjustments to Basis of Property.—For purposes of com-
puting depreciation the basis of any property which qualifies for the
investment credit shall be reduced by an amount equal to 7 percent
(3 percent in the case of a public utility) of the qualified investment.

SPECIFIC INSTRUCTIONS

Line 1. New Property.—Enter the basis of property as de-
scribed in General Instructions C and J 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.

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 returns, 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
to 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

U.S. GOVERNMENT PRINTING OFFICE

their respective amounts of used property which may be taken into
account.

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 7. Limi nn 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 7(a) and (b) shall be
$12,500 instead of $25,000. In the case of affiliated groups, the
$25,000 specified on lines 7(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 7(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.

€59—-16—77178-1