OMB No. 1545-0231

Form 6478

Department of the Treasury

Internal Revenue Service

Attachment

Sequence No. 83

Name(s) shown on return Identifying number

(b)

Rate

(c)

Column (a) x Column (b)

(a)

Number of Gallons

Sold or Used

Type of Alcohol Fuel

1

Straight alcohol and alcohol mixtures:

2a .54

b

190 proof or greater (in gallons)

2b .40

3

Less than 190 proof but at least 150 proof (in gallons)

3

2

Add lines 1, 2a, and 2b in both columns

4 Other fuels blended with the alcohol on lines 2a and 2b 4

5a Total gallons of fuel. Add lines 3 and 4 (column (a)) 5a

Total gallons containing less than 5.7% of 190-proof alcohol

or that are exempt from excise taxes (see instructions)

b

5b

6 Subtract line 5b from line 5a 6

7 Break down line 6 into the number of gallons of:

7a

a

.134**

7b

b

Aviation fuel for use in noncommercial aviation containing at

least 10% alcohol

(see instructions)

7c

Gasohol (and other fuels) containing less than 85% alcohol

(see instructions)

c Special motor fuel containing 85% or more alcohol (see instructions) .054

8 Add lines 7a through 7c, column (c) 8

9 Current year credit less excise tax benefit. Subtract line 8 from line 3. Include this amount in your income for 1996 9

10 Flow-through alcohol fuel credit(s) from a partnership, S corporation, estate, or trust (see instructions) 10

11 Total current year credit for alcohol used as fuel. Add lines 9 and 10 11

Only the rate for ethanol is shown. See instructions for lines 2 and 7 for rates for alcohol other than ethanol.

See Who Must File Form 3800 to find out if you complete the lines below or file Form 3800.

1 .10

a

Qualified ethanol fuel production (in gallons)

Cat. No. 13605J

*

*

Form 6478 (1996)

96 Credit for Alcohol Used as Fuel

© Attach to your return.

● Individuals. Enter amount from Form 1040, line 38

● 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

13a Credit for child and dependent care expenses (Form 2441, line 10) 13a

b Credit for the elderly or the disabled (Schedule R (Form 1040), line 20) 13b

d Foreign tax credit (Form 1116, line 32, or Form 1118, Sch. B, line 12) 13d

e Possessions tax credit (Form 5735) 13e

13f f

g 13g

Credit for fuel from a nonconventional source

h

Qualified electric vehicle credit (Form 8834, line 19)

Add lines 13a through 13g 13h

14 Net regular tax. Subtract line 13h from line 12 14

15 Alternative minimum tax:

● Individuals. Enter amount from Form 6251, line 28

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

● Estates and trusts. Enter amount from Form 1041, Schedule I, line 41

17 Tentative minimum tax (see instructions):

● Individuals. Enter amount from Form 6251, line 26

● Corporations. Enter amount from Form 4626, line 13 17

● Estates and trusts. Enter amount from Form 1041, Schedule I, line 37

18 If line 14 is more than $25,000, enter 25% (.25) of the excess (see instructions)

20 Subtract line 19 from line 16. If zero or less, enter -0- 20

21 Credit for alcohol used as fuel allowed for current year. Enter the smaller of line 11 or line 20

here and on Form 1040, line 42; Form 1120, Schedule J, line 4d; Form 1120-A, Part I, line 2a; or

the applicable line of your return 21

%

c Mortgage interest credit (Form 8396, line 11) 13c

Regular tax before credits:

16 Net income tax. Add lines 14 and 15 16

19 Enter the greater of line 17 or line 18 19

18

12

12

%

%

For Paperwork Reduction Act Notice, see page 3.

Rate effective 8/27/96 through 12/31/96. The rate is zero before 8/27/96 and after 12/31/96. **

Form 6478 (1996) Page 3

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., 46 min.

Learning about the

law or the form 34 min.

Preparing the form 1 hr., 42 min.

Copying, assembling, and

sending the form to the IRS 16 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. You can write to the IRS at the

address listed in the instructions for the

tax return with which this form is filed.

General Instructions

Purpose of Form

Use Form 6478 to figure your credit for

alcohol used as fuel. This credit consists

of the following:

You may claim or elect not to claim

the alcohol fuel credit at any time within

the 3 years from the due date of your

return (determined without regard to

extensions) on either an original or an

amended return.

Definitions and Special

Rules

Alcohol.—Alcohol, for credit purposes,

includes ethanol and methanol but does

not include:

1. Alcohol produced from petroleum,

natural gas, or coal (including peat), or

2. Alcohol of less than 150 proof. In

figuring the proof of any alcohol,

disregard any denaturants (additives that

make the alcohol unfit for human

However, methanol produced from

methane gas formed in waste disposal

sites is not alcohol produced from

natural gas, and is included for credit

purposes.

1. Uses it as fuel, or

2. Sells it as fuel to another person.

Straight alcohol.—The alcohol must not

be a mixture with gasoline, diesel, or

special motor fuel (other than as a

denaturant). The credit is for alcohol that

during the tax year is:

1. Used by the taxpayer as a fuel in a

trade or business, or

2. Is sold by the taxpayer at retail to

another person and put in the fuel tank

of that person’s vehicle.

Qualified ethanol fuel production.—

This is ethanol produced by an eligible

small ethanol producer (defined below)

and during the tax year:

1. Is sold by the producer to another

person—

a. For use by the buyer in the buyer’s

trade or business to produce a qualified

mixture (other than casual off-farm

production),

b. For use by the buyer as a fuel in a

trade or business, or

c. Who sells the ethanol at retail to

another person and puts the ethanol in

the retail buyer’s fuel tank; or

2. Is used or sold by the producer for

any purpose described in 1 above.

Diesel fuel.—This is any liquid other

than gasoline that can be used as a fuel

in a diesel-powered highway vehicle.

Special motor fuel.—This is any liquid

other than gasoline that is suitable for

use or is used in a motor vehicle or

motor boat.

Noncommercial aviation.—This is the

use of an aircraft other than in a

business of transporting persons or

property for pay.

Recapture of credit if not used as

fuel.—You must pay the tax on each

gallon of the alcohol or the alcohol in the

mixture at the applicable rate that you

used to figure the credit if you claim any

alcohol fuel credit and later you:

1. Separate the alcohol from the

mixture,

2. Use the mixture other than as a fuel,

3. Mix straight alcohol on which the

credit was allowed for the retail sale,

4. Use the straight alcohol other than

as a fuel, or

5. Do not use the fuel for the

purposes described under Qualified

ethanol fuel production above.

Report the tax on Form 720, Quarterly

Federal Excise Tax Return.

Eligible small ethanol producer.—This

is a person who, at all times during the

tax year, has a productive capacity for

alcohol of 30 million gallons or less. This

includes alcohol made from petroleum,

natural gas, coal, peat, and alcohol of

less than 150 proof.

The credit is available only to the

producer who blends the mixture. The

producer must use or sell the mixture in

a trade or business and the credit is

available only for the year the mixture is

sold or used. The credit is not allowed

for casual off-farm production of a

qualified mixture.

1. Alcohol mixture credit,

2. Alcohol credit, and

3. Small ethanol producer credit.

Alcohol mixture.—The alcohol must be

used to make a qualified mixture. A

qualified mixture combines alcohol with

gasoline, diesel, or special motor fuel.

The producer of the mixture either:

However, no credit is allowed for

alcohol used by the taxpayer as a fuel in

a trade or business if that alcohol was

sold in a retail sale described in 2

above.

Skip lines 1 through 9 if you are

claiming only a credit that was allocated

to you from a flow-through entity (i.e., S

corporation, partnership, estate, or trust).

Specific Instructions

Use lines 1 through 9 to figure any

alcohol fuel credit from your own trade

or business.

Note: We have shown in column (b) the

rate for ethanol only. If you have a credit

for alcohol other than from ethanol, enter

in column (b) the applicable rate shown

in the instructions for lines 2a, 2b, and

7a through 7c.

Line 2a.—Enter the number of gallons of

190 proof or greater alcohol and multiply

by the rate.

Line 2.—Enter on the appropriate line

the number of gallons sold or used.

Line 1.—Enter the number of gallons of

ethanol that meet the conditions listed

above under Qualified ethanol fuel

production. Do not enter more than 15

million gallons. Multiply by the rate of 10

cents per gallon.

If the line 11 credit includes any small

ethanol producer credit (line 1), you

must separately state to each

shareholder, partner, beneficiary, etc.,

the number of gallons on which the

credit was figured, and the productive

capacity for alcohol that you, the

flow-through entity, have. State the

productive capacity in terms of gallons.

S corporations, partnerships, estates,

and trusts.—Figure the total credit on

lines 1 through 11. Then, allocate the

line 11 credit to each shareholder,

partner, and beneficiary in the same way

that income and loss are divided.

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 Code section 6103.

consumption). The volume of alcohol

includes any denaturant up to 5% of the

volume of the alcohol and denaturant

combined.
Line 4.—Enter the number of gallons of

other fuels that you blended with the

alcohol shown on lines 2a and 2b. Other

fuels include gasoline, diesel, and

special motor fuel.

Line 5b.—Enter the number of gallons

included on line 5a that contain less

than 5.7% of 190-proof alcohol or are

exempt from excise taxes. The fuel can

be exempt because of specific

exemption, credit, or refund provisions

other than the alcohol fuel credit.

Examples of fuels exempt from excise

tax include fuel that is:

● Used on a farm for farming purposes.

● Supplied to military ships or aircraft or

certain commercial ships or aircraft.

● Used in off-highway business use.

● Used as fuel by a state, any political

subdivision of a state, or the District of

Columbia.

● Used as fuel by a nonprofit

educational organization.

● Used in an intercity, local, or school

bus.

● Used for certain helicopter uses.

Line 7.—If you sold or used alcohol or

an alcohol mixture as fuel, you may have

been entitled to an exemption, credit,

refund, or a reduced rate of excise tax.

The alcohol fuel credit must be reduced

to take into account any of these

benefits.

Line 7a.—Enter under column (a) the

number of gallons of fuel sold for use in

or used in an aircraft in noncommercial

aviation that is alcohol or alcohol

blended with aviation fuel other than

gasoline if you received an excise tax

benefit because the mixture contained at

least 10% alcohol. If the alcohol did not

contain ethanol, the rate under column

(b) is 14 cents (zero before August 27,

1996, and after December 31, 1996).

Lines 7b and 7c.—Use these lines for

all other fuels (including gasohol) if you

received an excise tax benefit because

the fuels contained alcohol.

Line 7b.—Enter under column (a) the

number of gallons of fuel that is a

mixture containing less than 85%

alcohol.

Line 7c.—Enter under column (a) the

number of gallons of special motor fuel

that contain 85% or more alcohol. If the

alcohol did not contain ethanol, the rate

under column (b) is 6 cents.

Line 9.—Include this amount in income,

under “Other income” on the applicable

line of your income tax return, even if

you cannot use all the credit because of

the tax liability limitations.

Line 10.—Enter the amount of credit

that was allocated to you as a

shareholder, partner, or beneficiary.

Line 11.—For an estate or trust, the

credit on line 11 is allocated between

the estate or trust and the beneficiaries

in proportion to the income allocable to

each. In the margin to the right of line

11, the estate or trust should enter its

part of the total credit. Label it “1041

PORTION” and use this amount in lines

12 through 21 (or Form 3800) to figure

the credit to claim on Form 1041. Also,

enter and identify the beneficiaries’

share of the credit to the right of line 11,

and attach a schedule to Form 6478

showing how the total credit was

divided.

Line 17.—Enter the tentative minimum

tax (TMT) that was 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 18.—See section 38(c)(3) for

special rules that apply to married

couples filing separate returns,

controlled corporate groups, regulated

investment companies, real estate

investment trusts, and estates and

trusts.

Line 21.—If you cannot use part of the

credit because of the tax liability limit

(line 20 is smaller than line 11), carry it

back 3 years, then forward for 15 years.

See the separate Instructions for Form

3800 for details.

Form 6478 (1996) Page 4

If your credit from a flow-through

entity includes the small ethanol

producer credit, the flow-through entity

must tell you the amount of the small

producer credit included in the

flow-through credit, the number of

gallons for which the entity claimed the

small ethanol producer credit, and the

productive capacity for alcohol. You as a

shareholder, partner, beneficiary, etc.,

are subject to the 15-million-gallon

limitation for line 1 and the 30-milliongallon productive capacity limitation for

an eligible small ethanol producer. If you

receive a small ethanol producer credit

from more than one entity, your credit

may be limited.

The rates are based on the

percentage of alcohol in the mixture.

Percentage of alcohol in mixture

Rate*

Ethanol

Other than

ethanol

At least 10%

At least 7.7% but less than 10%

At least 5.7% but less than 7.7%

.054

.04158

.03078

.060

.0462

.0342

Who Must File Form 3800

If for this year you have more than one

of the credits included in the general

business credit listed below, or have a

carryback or carryforward of any of the

credits, or have a credit from a passive

activity, you must complete Form 3800,

General Business Credit, instead of

completing lines 12 through 21 of Form

6478 to figure the tax liability limitation.

The general business credit consists

of the following credits:

The empowerment zone employment

credit (Form 8844), while a component

of the general business credit, is figured

separately on Form 8844 and is never

carried to Form 3800.

● 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),

● Disabled access (Form 8826),

● 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

● Trans-Alaska pipeline liability fund.

For alcohol other than from ethanol,

the rate is 60 cents per gallon.

Line 2b.—Enter the number of gallons of

alcohol that is less than 190 proof but at

least 150 proof and multiply by the rate.

For alcohol other than from ethanol,

the rate is 45 cents per gallon.

*These rates are zero after December 31, 1996, for

mixtures of alcohol and aviation gasoline.

● Orphan drug (Form 8820),