Form 5695 Residential Energy Credit OMB No, 1545-0214
> Attach to Form 1040. > See Instructions on back. q 9 84

Departr it of the Tr

internal Revenue Service > For Paperwork Reduction Act Notice, see Instructions on back.

Name(s) as shown on Form 1040 Your social security number

Enter the address of your principal residence on which the credit is claimed if it is different from the address shown on Form 1040,

ifyou have an energy credit carryover from a previous tax year and no energy savings costs this year, skip to Part Il, line 24.
Fill in your energy conservation costs (but do not include repair or maintenance costs).

1 Was your principal residence substantially completed before April 20, 1977? (See instructions) P Yes No
Note: You MUST answer this question. Failure to do so will delay the processing of your return. If you checked the “No” box, you
CANNOT claim an energy credit under Part | and you should not fill in lines 2a through 12 of this form.
2 a Insulation. . . I
b Storm (or thermal) windows or doors Be ee ee ee LAD
c¢ Caulking or weatherstripping . . . Se ee ee ee ee. LR
d= Areplacement burner for your existing furnace thatreducesfueluse. . . ....... . {2d
e Adevice for modifying flue openings to make a heating system moreefficient . . . . . . . . L2e
f Anelectrical or mechanical furnace ignition system that replaces agaspilotlight . . . . . . . L2f
g Athermostatwithanautomaticsetback . 2. 2... ee ee ee LE
h_ Ameter that shows the costofenergyused . 2 1. 1. ee ee ee ee LR
3 Total (add lines 2athrough 2h). . . . . .. Ls
4 Enter the part of expenditures made from nontaxable government grants and subsidized financing . 4
5 Subtractline4fromline3 . . . . So ee ee LB
6 Maximum amount of cost on which credit can be figured 6 $2,000/ 00
7 Enter the total energy conservation costs for this residence. Add lines 2 of yc your 1978, 1979, and 1980
Forms 5695 and line 3 of your 1981, 1982,and1983Forms5695. . . ..........(L2
8 Subtract line 7 from line 6. If line 7 exceeds line 6, enter zerohereandonlinel2 . . . . 8
9 Enter the total nontaxable grants and subsidized financing used to purchase qualified energy items for
this residence. Add the amount on line 4 of this form and your 1981, 1982, and 1983 Forms 5695. . . 9
10 Subtract line 9 from line 8. If zero or less, do not complete the restofPartl . . . . ..... . [10
11 Enter the amount on line 5 or line 10, whichever isless. re i ©
12 _Enter 15% of line 11 here and include in amount on line 23 below _. [12
Fill in your renewable energy source costs (but do not include repair or or maintenance costs).
13 a Solar________|  13b Geothermal |__ 13¢ Wind | Total > |13d
14 Enter the part of expenditures made from nontaxable government grants and subsidized financing. . . L14
15 Subtract line 14 fromlinel3d. . . . . 3)
16 Maximum amount of cost on which the credit ¢ can be figured . woe 16 | $10,000| 00
17 Enter the total renewable energy source costs for this residence. Add line 5 of your 1978 Form 5695,
line 9 of your 1979 and 1980 Forms 5695, and line 13d of your 1981, 1982, and 1983 Forms 5695. . 17.
18 Subtract line 17 from line 16. If line 17 exceeds line 16, enterzerohereandonline22.... . . 18
19 Enter the total nontaxable grants and subsidized financing used to purchase qualified energy items for
this residence. Add the amount on line 14 of this form and your 1981, 1982, and 1983 Forms 5695 . . [19
20 Subtract line 19 from line 18. If zero or less, donot complete therestofPartl . . . . . . . , , [20
21 Enter the amount on line 15 or line 20, whichever isless . . res o> 3
Enter 40% of line 21 here and include in amount on line 23 below woe | 22
Fill in this part to figure the limitation.
23 Add lines 12 and 22. Ifless than $10, enterzero. . . . see. [28
24 Enter your energy credit carryover from a previous tax year. Caution—Do not make an entry on this line
if your 1983 Form 1040, line 49, showed anamountofmorethanzero. . . . ..... . . . L24
25 Addlines23and24.. . . Sa =)
26 Enter the amount of tax shown on Form 1040, ‘line 40. ee ee eee es [26
27 Add lines 41, 42, and 44 from Form 1040 andenterthetotal. . . 2... 1. 1... LOZ
28 Subtract line 27 from line 26. If zero or less, enterzero. . . . se es £28
29 Residential energy credit. Enter the amount on line 25 or line 28, whichever i is ‘tess. Aso, enter this
amount on Form 1040, line 43. Complete Part IV below if this line is less thanline25 .. 29
Fill in this part to figure your carryover to 1985 (complete only if line 29 is Tass than line 25).
30 EnteramountfromPartill, line25 2. 6 2. ee ee ee ee ee ee [80
31 > Enteramount from Partill, line29 . . rr 2
32__Credit carryover to 1985 (subtract line 31 from line 30), Fa 7



General Instructions

Paperwork Reduction Act Notice.—We ask for
this information to carry out the Internal Revenue
laws of the United States. We need it to ensure
that taxpayers are complying with these laws and
to allow us to figure and collect the right amount.
of tax. You are required to give us this
information.

Purpose of Form.—Use this form to figure your
residential energy credit if you had qualified
energy saving items installed in your principal
residence. The instructions below list conditions
you must meet to take the credit. If you have an
energy credit carryover from the previous tax year
and no energy saving costs this year, skip to Part
lof the form. Attach Form 5695 to your tax
return. For more information, please get
Publication 903, Energy Credits for Individuals.

Two energy credits make up the residential
energy credit, each with its own conditions and
limits. These credits are based on: (1) Costs for
home energy conservation; and (2) Costs for
renewable energy source property.

The credit is based on the cost of items
installed in your principal residence after April
19, 1977, and before January 1, 1986

What is Your Principal Residence?—To quality
as your principal residence, your residence must
be the home in the United States where you live
(you may own it or rent it from another person).

Asummer or vacation home does not qualify.

Special Rules.—If you live in a condominium,
cooperative apartment, occupy a dwelling unit
jointly, or share the cost of energy property, see
Publication 903 for more details

What are Energy Saving Items?—You can take
the credit for energy conservation and renewable
energy source items.

Energy conservation items are limited to:

© insulation (fiberglass, cellulose, etc.) for
ceilings, walls, floors, roofs, water heaters,
etc.;

© storm (or thermal) windows or doors for
the outside of your residence;

© caulking or weatherstripping for windows
or doors for the outside of your residence;

@ areplacement burner for your existing
furnace that reduces fuel use. The burner
must replace an existing burner. It does
not qualify if it is acquired as a component
of, or for use in, a new furnace or boiler;

© a device for modifying flue openings to
make a heating system more efficient;

© anelectrical or mechanical furnace
ignition system that replaces a gas pilot
light;

@ a thermostat with an automatic setback;

@ ameter that shows the cost of energy
used.

To take the credit for an energy conservation
item, you must:

© install the item in your principal residence
which was substantially completed before
April 20, 1977;

© be the first one to use the item; and
© expect it to last at least 3 years.

For energy conservation items, you may not
claim more than $300 ($2,000 x 15%)
accumulated credit for each principal residence.
Therefore, if in 1984 you claim the maximum
$300 credit, you may not claim more in future
years on the same residence. If, however, you
buy a new principal residence that was
‘substantially completed before April 20, 1977,
you may claim the maximum $300 credit on the
new residence.

Renewable energy source items include
solar, wind, and geothermal energy items that
heat or cool your principal residence or provide
hot water or electricity for it.

Examples of solar energy items that may
qualify include:

© collectors;

© rockbeds;

© heat exchangers; and
e

solar panels installed on roofs (including
those installed as a roof or part of a roof).

An example of an item that uses wind energy
is a windmill that produces energy in any form
(usually electricity) for your residence.

Geothermal energy property expenditures
must be made in connection with a ‘‘geothermal
deposit.” A geothermal deposit is one having a
temperature exceeding 50 degrees Celsius (122
degrees Fahrenheit) as measured at the
wellhead or in the case of a natural hot spring
(where no well is drilled), at the intake to the
distribution system . Generally , the qualifying
geothermal resources that are economically
recoverable are located in States west of the
Rocky Mountains (except for geothermal springs
located in Arkansas).

To take the credit for a renewable energy
source item, you must:

© bethe first one to use the item; and
© expect it to last at least 5 years.

For renewable energy source items, you may
not claim more than $4,000 ($10,000 x 40%)
accumulated credit for each principal residence.
Therefore, if in 1984 you claim the maximum
$4,000 credit, you may not claim more in future
years on the same residence. If, however, you
buy a new principal residence, you may claim the
maximum $4,000 credit on your new residence.

What Items are NOT Eligible for the Energy
Credit? —Do not take credit for:

© carpeting;

drapes;

wood paneling;

wood or peat-burning stoves;

hydrogen fueled residential equipment;
siding for the outside of your residence;
heat pumps (both air and water);
fluorescent replacement lighting systems;
replacement boilers and furnaces; and

@ swimming pools used to store energy.

Federal, State, or Local Government
Nontaxable Grants and Subsidized
Financing.—Qualified expenditures financed
with nontaxable Federal, State, or local
government grants cannot be used to figure the
energy credit. Also, if Federal, State, or local
government programs provide subsidized
financing for any part of qualified expenditures,
that part may not be used to figure the energy
credit. You must reduce the expenditure limits on
energy conservation and renewable energy source
property for a dwelling by the part of expenditures
financed by Federal, State, or local government
subsidized energy financing, as well as by the
amount of nontaxable Federal, State, or local
government grants used to purchase conservation
or renewable energy source property.

Figuring the Credit for More Than One
Principal Residence.—You can take the
maximum credit for each principal residence you
live in. If you use all of your credit for one
residence and then move, you may take the
maximum credit amount on your next residence.

To figure your 1984 energy credit for more
than one principal residence:

(1) Fillout Part | or Il on a separate Form
5695 for each principal residence;

(2) Enter the total of all parts on line 23 of
one of the forms;

(3) _ In the space above line 23, write “More
than one principal residence;” and

(4) Attach all forms to your return.

Caution: You should keep a copy of each Form
5695 that you file for your records. For example,
if you sell your principal residence, you will need
to know the amount of the credit claimed in prior
tax years. If the items for which you took the
credit increased the basis of your principal
residence, you must reduce the basis by the
credit you took.

If the Credit is More Than Your Tax.—If your
energy credit for this year is more than your tax
minus certain other credits, you may carry over
the excess energy credit to the following tax year
or until the maximum accumulated credit is used.

Specific Instructions

Part I, Line 1.— For energy conservation items
to qualify, your principal residence must have
been substantially completed before April 20,
1977. A dwelling unit is considered substantially
completed when it can be used as a personal
residence even though minor items remain un-
finished.

Lines 2a through 2h.—Enter your energy
conservation costs (including expenditures made
with nontaxable government grants and
subsidized financing) only for this tax year. Count
the cost of the item and its installation in or on
your principal residence. Do not include the cost
of repairs or maintenance for energy
conservation items.

Line 4.—Enter the amount of nontaxable
government grants and subsidized financing used
to purchase the energy items on lines 2a through
2h. If you do not know the amount, check with
the government agency that gave you the grant or
subsidized financing.

Line 7.—Enter your total energy conservation
costs from 1978, 1979, 1980, 1981, 1982, and
1983 for this principal residence. If your total
costs from these years exceeds $2,000, you may
not claim any additional credit on this residence.
If you had energy conservation costs in the
previous tax year but could not take a credit
because it was less than $10, enter zero.

Line 9.—Enter the part of nontaxable
government grants and subsidized financing
received under Federal, State, or local programs
to purchase energy items in 1981 through 1984.
You must use the amounts received under these
programs to reduce the maximum amount of cost
used to figure the credit. If you do not know the
amount of the nontaxable grant, check with the
government agency which gave you the grant or
Subsidized financing.

Part Il, Lines 13a through 13d.—Enter your
renewable energy source costs (including
expenditures made with nontaxable government
grants and subsidized financing) only for this tax
year. Do not include the cost of repairs or
maintenance for renewable energy source items.

Line 14.—See Part |, line 4 for an explanation.

Line 17.—Enter your total renewable energy
source costs from 1978, 1979, 1980, 1981,
1982, and 1983 for this principal residence. If
your total costs from these years exceed
$10,000, you may not claim any additional credit
on this residence. If you had renewable energy
source costs in the previous tax year but could
not take a credit because it was less than $10,
enter zero.

Line 19.—See Part I, line 9 for an explanation.

Part Ill, Line 24.—Generally, your energy credit
carryover will be computed on your prior year
Form 5695, Part IV. Exception—If the
alternative minimum tax applied, see
Publication 909, Alternative Minimum Tax.

Part IV.—Complete this part only if line 29 is
less than line 25. You can carry over the amount
entered on line 32 to your next tax year.