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 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

0.016

3

3

3

For Paperwork Reduction Act Notice, see the back of form. Cat. No. 14954R Form 8835 (1997)

8835

3

Name(s) shown on return Identifying number

1

2

3

4

5

6

7

8

9

10

11

12

13

14

%

$

$

.

0.016

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 39

● 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 (Form 1116, line 32, or Form 1118, Sch. B, line 12)

e

16f f

Possessions tax credit (Form 5735) g 16g

h Credit for fuel from a nonconventional source 16h

i Qualified electric vehicle credit (Form 8834, line 19)

Add lines 16a through 16i 16j

17 Net regular tax. Subtract line 16j 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 42

20 Tentative minimum tax (see instructions):

● Individuals. Enter amount from Form 6251, line 26

● Corporations. Enter amount from Form 4626, line 13 20

● Estates and trusts. Enter amount from Form 1041, Schedule I, line 38

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 44; 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

%

1997

Adoption credit (Form 8839, line 10)

c 16c

16i

j

District of Columbia first-time homebuyer credit (Form 8859)
Form 8835 (1997) 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

10 hr., 12 min.; Learning about the law or the

form 12 min.; Preparing and sending the form

to the IRS 22 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.

Section references are to the Internal Revenue

Code.

Purpose of Form

Who Must File Form 3800

The general business credit consists of the

following credits: investment, work opportunity,

welfare-to-work, 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, orphan drug, contributions to

selected community development corporations,

and trans-Alaska pipeline liability fund.

● Qualified energy resources means closed-loop

biomass 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 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. This facility must be

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 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.

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.

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 20. 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 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 limitations (line 23 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 kilowatt hours of electricity

produced and sold during 1997 from a qualified

wind facility and multiply by $.016. The $.016

rate will also apply to 1998 sales if the 1998 IAF

is less than 1.1. If the 1998 IAF causes a rate

increase, fiscal year filers with 1998 sales must

figure line 4 as explained under Fiscal year

taxpayers.

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.

Use Form 8835 to claim the renewable electricity

production credit. The credit is allowed for the

sale of electricity produced in the United States

or U.S. possessions from qualified energy

resources (see Definitions).

Fiscal year taxpayers. If you have sales in 1997

and 1998 and the credit rate on line 1 or 4 or the

phaseout adjustment on line 2 or 5 is different

for 1998, 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 1997 from a facility

using closed-loop biomass as the renewable

resource and multiply by $.016. The $.016 rate

will also apply to 1998 sales if the 1998 IAF is

less than 1.1. If the 1998 IAF causes a rate

increase, fiscal year filers with 1998 sales must

figure line 1 as explained under Fiscal year

taxpayers.

Line 2. There is no phaseout adjustment for

calendar year 1997. Calendar year filers enter

zero on line 2. Fiscal year filers with sales in

1998 also enter zero if the published 1998

reference price is equal to or less than the 1998

adjusted threshold price. If the 1998 reference

price exceeds the 1998 adjusted threshold price,

the phaseout adjustment applies for 1998 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 limit.

Line 5. There is no phaseout adjustment for

calendar year 1997. Calendar year filers enter

zero on line 5. Fiscal year filers with sales in

1998 also enter zero if the published 1998

reference price is equal to or less than the 1998

adjusted threshold price. If the 1998 reference

price exceeds the 1998 adjusted threshold price,

the phaseout adjustment applies for 1998 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).

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.

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 1997, per Notice 97-30,

1997-1 C.B. 416, the IAF is 1.097 and the

reference price per Kwh is 0 cents for facilities

producing electricity from closed-loop biomass

energy resources and is 6.4 cents for facilities

producing electricity from wind energy resources.

Therefore, the credit is 1.6 cents per Kwh (1.5 x

1.097 rounded to the nearest .1 cent) and the

adjusted threshold price is increased to 8.8 cents

(8 x 1.097 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 9.8¢ and the

adjusted threshold price is 8.8¢, reduce the

credit by 1/3 ((9.8¢ – 8.8¢) ÷ 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.

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.

Definitions

General Instructions

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.