com 0765 Credit for Increasing Research Activities

(or for claiming the orphan drug credit)

Department of the Treasury > See separate Instructions.
Internal Revenue Service > Attach to your return.

OMB No. 1545-0619

1991

Attachment
Sequence No. 81

Name(s) as shown on return’ Identifying number

Current Year Orphan Drug Credit

1 Qualified clinical testing expenses paid or incurred (do not include any
amounts claimed as current year research expenses on line 18 below) |1

2 Limitation. Enter 50% (.50) of line 1 (see instructions). . 2
3 Flow-through orphan drug credit(s) from a partnership, S corporation, estate, or ‘trust . 3
4 Current year orphan drug credit. Add lines 2 and 3. _ 4
Tax Liability Limitation for the Orphan Drug and Research Credits
5a_ Individuals. Enter amount from Form 1040, line 40. .
b Corporations. Enter amount from Form 1120, Schedule J, line 3 (Form 4120-1 A filers 5
claiming the research credit, enter amount from Form 1120-A, Part |, line 1) .
c Other filers. Enter regular tax before credits from your return .
6 Credits that reduce regular tax before the orphan drug credit:
a Credit for child and dependent care expenses (Form 2441). . . . 6a
b Credit for the elderly or the disabled (Schedule R (Form 1040)) . . L6b
¢ Foreign tax credit (Form 1116 or Form 1118). . . . . . . . [6
d_ Possessions tax credit (Form $735). . . . . . ..... . [6d
e Mortgage interest credit (Form 8396)... ....... . (6e
f Add lines 6a through 6e : . St
7 Net regular tax. Subtract line 6f from line 5 . 7
8 Tentative minimum tax (see instructions):
a Individuals. Enter amount from Form 6251, line 20.
b Corporations. Enter amount from Form 4626, line 14. . 8
¢ Estates and trusts. Enter amount from Form 8656, line 37 .
9 Excess of net regular tax over tentative minimum tax. Subtract line 8 from line 7 9
10 Orphan drug credit. Enter here and on the appropriate line of your return the smaller of line 4
or line 9. . ree 10
Current Year Credit for Increasing Research Activities
11. Basic research payments paid or incurred to qualified organizations 11
12 Base period amount. 12
43. Subtract line 12 from line 11. If less than zero, enter -O-. 13
Qualified research expenses paid or incurred (lines 14-17):
14 Wages for qualified services (do not include wages used in figuring the jobs credit) 14
15 Cost of supplies . 15
16 Rental or lease costs of computers. 16
17 65% (.65) of contract expenses . 17
18 Total qualified research expenses. Add lines 14 ‘through 17. : 18
19 Enter fixed-base percentage, but not more than 16% (see instructions). 19 %
20 Enter average annual gross receipts (see instructions) . 20
21 Base amount. Multiply line 20 by the percentage on line 19 (see instructions) 24
22 Subtract line 21 from line 18 . 22
23 Multiply line 18 by 50% (.50) . 23
24 Enter smaller of line 22 or 23. 24
25 Add lines 13 and 24. 25
26 Tentative credit. Multiply line 25 by 2 20% (.: (20). If you do not elect the reduced credit under Section
280C(c), enter the result and see the instructions. If you do elect the reduced credit, multiply the
result by 66% (.66) and enter that amount instead. Also write “Sec. 280C” in the margin to the
right of the entry space. . . 26
27 Flow-through research credit(s) ) from a ‘partnership, s corporation, estate, « or trust . . 27
28 Current year credit for increasing research activities. Add lines 26 and 27. Enter here and
see Claiming the Credit on page 2 to see if you have to file Form 3800_. oo 28

See Paperwork Reduction Act Notice on page 2. Cat. No. 13700H

Form 67685 (1991)


Form 6765 (1991)

Page 2

Tax Liability Limitation for the Research Credit

29 From the net regular tax on line 7, Part Il, subtract any orphan drug credit from line 10, Part Il,
and any nonconventional source fuel credit shown on your return. Enter the result here... 29

30 Net income tax:

a_ Individuals. Add line 29 above and line 22 of Form 6251

b Corporations. Add line 29 above and line 16 of Form 4626

c Estates and trusts. Add line 29 above and line 39 of Form 8656 .

31 If line 29 is more than $25,000, enter 25% (.25) of the excess (see instructions)

32 Subtract line 8, Part Il, or line 31, whichever is greater, from line 30. Enter the result. If less than

zero, enter -O-

33 Corporations. Enter here and ¢ on the appropriate line ofy your return nthe smaller of line 28 or line

32. This is your General Business Credit for 1991

34 Individuals, estates, and trusts. Enter here and on the appropriate ‘tine of your return the smaller
of line 28 or the amount from the formula in the instructions for line 34 (but do not enter more

than line 32). This is your General Business Credit for 1991 _.

30

31

32

33

34

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 . . 7 hr, 39 min.
Learning about the

law or the form . . thr, 5 min.
Preparing and sending

the form to the IRS . 1 hr, 16 min.

If you have comments concerning the
accuracy of these time estimates or
suggestions for making this form more
simple, we would be happy to hear from
you. You can write to both the IRS and
the Office of Management and Budget
at the addresses listed in the
instructions of the tax return with which
this form is filed.

Claiming the Credit

The research credit shown on line 28 is
one of seven credits that make up the
general business credit. The general
business credit consists of the
investment credit (Form 3468), jobs
credit (Form 5884), credit for alcohol
used as fuel (Form 6478), research credit
(Form 6765), low-income housing credit

(Form 8586), enhanced oil recovery
credit (Form 8830), and disabled access
credit (Form 8826).

If you have more than one of these
credits for 1991, a carryback or
carryforward of any of these credits, or a
research credit from a passive activity,
you must attach the appropriate credit
forms and summarize them on Form
3800, General Business Credit. It is also
used to figure the tax liability limitation.
Do not complete Part IV above.

If you have only a 1991 research
credit and the credit is not from a
passive activity, complete Part IV above.
You do not have to file Form 3800 for
this year.

‘#U.S.GPO:1991.0-285-381