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 or poultry waste

facility placed in service after 1999:

1 Kilowatt-hours produced and sold

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:

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 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 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 the back of form. Cat. No. 14954R Form 8835 (1999)

8835



Name(s) shown on return Identifying number

1

2

3

4

5

6

7

8

9

10

11

12

13

14



$

$

0.017

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

● Individuals. Enter amount from Form 1040, line 40

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

● Other filers. Enter regular tax before credits from your return

16a Credit for child and dependent care expenses (Form 2441, line 9) 16a

b Credit for the elderly or the disabled (Schedule R (Form 1040), line 20) 16b

16e

Foreign tax credit

e

16f f

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

g 16g

h 16h

Credit for fuel from a nonconventional source

i

Qualified electric vehicle credit (Form 8834, line 19)

Add lines 16a through 16k 16l

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

18 Alternative minimum tax:

● Individuals. Enter amount from Form 6251, line 28

● Corporations. Enter amount from Form 4626, line 15 18

● Estates and trusts. Enter amount from Form 1041, Schedule I, line 39

20 Tentative minimum tax (see instructions) 20

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

23 Subtract line 22 from line 19. If zero or less, enter -0- 23

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

line 23 here and on Form 1040, line 47; Form 1120, Schedule J, line 4d; Form 1120-A, Part I, line 2a;

Form 1041, Schedule G, line 2c; or the applicable line of your return 24

Part II





Mortgage interest credit (Form 8396, line 11)

d 16d

Regular tax before credits:

19 Net income tax. Add lines 17 and 18 19

22 Enter the greater of line 20 or line 21 22

21

15

15

Adoption credit (Form 8839, line 15)

c 16c

16i

j

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

Education credits (Form 8863, line 18)

Child tax credit (Form 1040, line 43)

k

l

16j

16k

1999
Form 8835 (1999) Page 3

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, 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. Enter the kilowatt-hours of electricity produced and

sold during 1999 that qualify for the credit from a qualified

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

apply to 2000 sales if the 2000 IAF is less than 1.1667. If the

2000 IAF causes a rate increase, fiscal year filers with 2000

sales must figure line 4 as explained under Fiscal year

taxpayers. No credit is generally 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.

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 1999 and 2000

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

on line 2 or 5 is different for 2000, 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 kilowatt-hours of electricity produced and

sold during 1999 from a facility using closed-loop biomass as

the renewable resource and multiply by $.017. The $.017 rate

will also apply to 2000 sales if the 2000 IAF is less than

1.1667. If the 2000 IAF causes a rate increase, fiscal year

filers with 2000 sales must figure line 1 as explained under

Fiscal year taxpayers. Also enter the kilowatt-hours of

electricity produced and sold in 2000 from a qualified facility

using poultry waste as the renewable resource and multiply

by the rate applicable to 2000 sales.

Line 2. There is no phaseout adjustment for calendar year

1999. Calendar year filers enter zero on line 2. Fiscal year

filers with sales in 2000 also enter zero if the published 2000

reference price is equal to or less than the 2000 adjusted

threshold price. If the 2000 reference price exceeds the 2000

adjusted threshold price, the phaseout adjustment applies for

2000 sales. See How To Figure the Credit for figuring the

adjustment.

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.

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 1999, per Notice 99-26, 1999-21

I.R.B. 4, the IAF is 1.1269 and the reference price per kWh is

0 cents for facilities producing electricity from closed-loop

biomass energy resources and is 4.836 cents for facilities

producing electricity from wind energy resources. Therefore,

the credit is 1.7 cents per kWh (1.5 x 1.1269 rounded to the

nearest .1 cent) and the adjusted threshold price is increased

to 9.0 cents (8 x 1.1269 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

Changes To Note

The Tax Relief Extension Act of 1999 made the following

changes to the renewable electricity production credit.

● The time for placing a qualified facility in service has been

extended until December 31, 2001. However, electricity

produced by a qualified wind facility placed in service after

June 30, 1999, and sold to a utility under a contract originally

entered into before 1987 may not quality for the credit.

● The credit has been expanded to include poultry waste

facilities placed in service after 1999.

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. For more details, see Rev. Rul. 94-31, 1994-1

C.B.16.

● 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.
Form 8835 (1999) Page 4

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. Although you may not owe alternative minimum tax

(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:

Line 21. 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.

Line 24. If you cannot use part of the credit because of the

tax liability limit (line 23 is less than line 14), carry the excess

back 1 year and then forward 20 years. See the separate

Instructions for Form 3800 for details.

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

Line 9. Enter the total amount of additions to the capital

account for the project for this and all prior tax years.

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 5. There is no phaseout adjustment for calendar year

1999. Calendar year filers enter zero on line 5. Fiscal year

filers with sales in 2000 also enter zero if the published 2000

reference price is equal to or less than the 2000 adjusted

threshold price. If the 2000 reference price exceeds the 2000

adjusted threshold price, the phaseout adjustment applies for

2000 sales. See How To Figure the Credit for figuring the

adjustment.

Line 14. Flow-through entities should report the amount on

line 14 as follows.

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 10 hr., 31 min.

Learning about the law

or the form 12 min.

Preparing and sending

the form to the IRS 23 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), and

● 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: