Investment Credit

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Instructions for Form 3468

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2008

Department of the Treasury
Internal Revenue Service

Instructions for Form 3468
Investment Credit
Section references are to the Internal Revenue Code unless
otherwise noted.

General Instructions
What’s New
The Housing and Economic Recovery Act of 2008 allows the
rehabilitation credit to offset the alternative minimum tax for
periods after 2007.
The Tax Extenders and Alternative Minimum Tax Relief Act
of 2008 increased the rehabilitation credit for certain properties
damaged or destroyed as a result of the severe storms,
tornados, or flooding in the Midwestern disaster area.

who is related or who has other than a creditor interest in the
business activity. The cost or basis must be reduced by the
amount of this “nonqualified nonrecourse” financing related to
the property as of the close of the tax year in which the property
is placed in service. If, at the close of a tax year following the
year property was placed in service, the nonqualified
nonrecourse financing for any property has increased or
decreased, then the credit base for the property changes
accordingly. The changes may result in an increased credit or a
recapture of the credit in the year of the change. See sections
49 and 465 for details.

Recapture of Credit

You may have to refigure the investment credit and recapture
The Energy Improvement and Extension Act of 2008:
all or a portion of it if:
• Added three new energy properties eligible for the energy
• You dispose of investment credit property before the end of 5
credit for property placed in service after October 3, 2008.
full years after the property was placed in service (recapture
• Increased the qualified fuel cell limit from $500 per half
period);
kilowatt capacity to $1,500 per half kilowatt capacity.
• You change the use of the property before the end of the
• Allow the energy credit to offset the alternative minimum tax
recapture period so that it no longer qualifies as investment
for tax years beginning after October 3, 2008.
credit property;
• The business use of the property decreases before the end
The American Recovery and Reinvestment Act of 2009:
of the recapture period so that it no longer qualifies (in whole or
• Added a new investment credit for qualifying advanced
in part) as investment credit property;
energy project credit for periods after February 17, 2009.
• Repealed the credit limitation for qualified small wind energy
• Any building to which section 47(d) applies will no longer be a
property for periods after December 31, 2008.
qualified rehabilitated building when placed in service;
• Provides an election to treat qualified facilities as energy
• Any property to which section 48(b) applies will no longer
property for facilities placed in service after December 31, 2008.
qualify as investment credit property when placed in service;
• Before the end of the recapture period, your proportionate
Purpose of Form , and qualifying advanced energy project credit interest is reduced by more than one-third in an S corporation,
partnership (other than an electing large partnership), estate, or
Use Form 3468 to claim the investment credit. The investment
trust that allocated the cost or basis of property to you for which
credit consists of the rehabilitation, energy, qualifying advanced
you claimed a credit;
coal project, and qualifying gasification project credits.
• You return leased property (on which you claimed a credit) to
the lessor before the end of the recapture period; or
Investment Credit Property
• A net increase in the amount of nonqualified nonrecourse
Investment credit property is any depreciable or amortizable
financing occurs for any property to which section 49(a)(1)
property that qualifies for the rehabilitation credit, energy credit,
applied.
qualifying advanced coal project credit, or qualifying gasification
• A renewable energy grant was provided for section 48
, or qualifying advanced energy project credit
project credit.
property that was allowed a credit for progress expenditures
You cannot claim a credit for property that is:
before the grant was made.
• Used mainly outside the United States (except for property
Exceptions to recapture. Recapture of the investment credit
described in section 168(g)(4));
does not apply to any of the following.
• Used by a governmental unit or foreign person or entity
• A transfer due to the death of the taxpayer.
(except for a qualified rehabilitated building leased to that unit,
• A transfer between spouses or incident to divorce under
person, or entity; and property used under a lease with a term
section 1041. However, a later disposition by the transferee is
of less than 6 months);
subject to recapture to the same extent as if the transferor had
• Used by a tax-exempt organization (other than a section 521
disposed of the property at the later date.
farmers’ cooperative) unless the property is used mainly in an
• A transaction to which section 381(a) applies (relating to
unrelated trade or business or is a qualified rehabilitated
certain acquisitions of the assets of one corporation by another
building leased by the organization;
corporation).
• Used for lodging or in the furnishing of lodging (see section
• A mere change in the form of conducting a trade or business
50(b)(2) for exceptions); or
if:
• That is energy property used in a facility that qualifies for a
1. The property is retained as investment credit property in
credit under section 45.
that trade or business, and
2. The taxpayer retains a substantial interest in that trade or
At-Risk Limit for Individuals and Closely
business.

Held Corporations

The cost or basis of property for investment credit purposes
may be limited if you borrowed against the property and are
protected against loss, or if you borrowed money from a person

A mere change in the form of conducting a trade or business
includes a corporation that elects to be an S corporation and a
corporation whose S election is revoked or terminated.

Cat. No. 12277P

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Instructions for Form 3468

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* The basis of the qualifying investment in advanced
energy project property for Part II, line 8a.

See section 46(g)(4) (as in effect on November 4, 1990),
and related regulations, if you made a withdrawal from a
CAUTION capital construction fund set up under the Merchant
Marine Act of 1936 to pay the principal of any debt incurred in
connection with a vessel on which you claimed investment
credit.
For details, see Form 4255, Recapture of Investment Credit.

!

Specific Instructions
Note. Do not attach this form to your tax return if you are (a)
an estate or trust whose entire qualified rehabilitation
expenditures or bases in energy property are allocated to the
beneficiaries, (b) an S corporation, or (c) a partnership (other
than an electing large partnership). However, you must
complete lines 10k and 10l of this form and attach it if you are
the owner of a certified historic structure.
, 5r, and 5s.

, 11o and 11p.

Shareholders of S Corporations,
Partners of Partnerships, and
Beneficiaries of Estates and Trusts
If you are a shareholder, partner (other than a partner in an
electing large partnership), or beneficiary of the designated
pass-through entity, the entity will provide to you the information
necessary to complete the following:
• Lines 10b through 10j for the rehabilitation credit.
• The basis of energy property for Part II, lines 5a, 5b, 5o, and
5q, or Part III, lines 11a, 11b, 11l, and 11n.
• The basis for energy property for Part II, lines 5c, 5f, and 5i or
Part III, lines 11c and 11f, and the kilowatt capacity for Part II,
lines 5d, 5g, and 5j or Part III, lines 11d and 11g, respectively.
• The basis of energy property for Part II, line 5l or Part III, line
11i, and the megawatt capacity or horsepower for Part II, line
5m, or Part III, line 11j.
• The basis of the qualifying investment in advanced coal
project property for Part II, lines 6a through 6c.
• The basis of the qualifying investment in a gasification project
property for Part II, lines 7a and 7b.

Part I. Information Regarding the Election to
Treat the Lessee as the Purchaser of Investment
Credit Property
If you lease property to someone else, you may elect to treat all
or part of your investment in new property as if it were made by
the person who is leasing it from you. Once the election is
made, the lessee will be entitled to an investment credit for that
property for the tax year in which the property is placed in
service and the lessor will generally not be entitled to such a
credit.
If the leased property is disposed of, or otherwise ceases to
be section 38 property, the property will generally be subject to
the recapture rules for early dispositions.
For information on making the election, see section 48(d) (as
in effect on November 4, 1990) and related regulations. For
limitations, see sections 46(e)(3) and 48(d) (as in effect on
November 4, 1990).

Line 2. Address of lessor
Enter the lessor’s full address. Enter the address of the lessor’s
principal office or place of business. Include the suite, room, or
other unit number after the street address. If the post office
does not deliver mail to the street address and the lessor has a
P.O. box, show the box number instead.
Note. Do not use the address of the registered agent for the
state in which the lessor is incorporated. For example, if a
business is incorporated in Delaware or Nevada and the
lessor’s principal place of business is located in Little Rock, AR,
you should enter the Little Rock address.
If the lessor receives its mail in care of a third party (such as
an accountant or attorney), enter on the street address line “C/
O” followed by the third party’s name and street address or P.O.
box.

Part II and Part III. Energy Credit
Note. Use Part II to figure the energy credit if your tax year
began before October 4, 2008. Use Part III to figure the energy
credit if your tax year began after October 3, 2008.
If energy property is financed in whole or in part by
subsidized energy financing or by tax-exempt private activity
bonds, the amount that you can claim as basis is the basis that
would otherwise be allowed multiplied by a fraction that is 1
reduced by a second fraction, the numerator of which is that
portion of the basis allocable to such financing or proceeds, and
the denominator of which is the basis of the property. For
example, if the basis of the property is $100,000 and the portion
allocable to such financing or proceeds is $20,000, the fraction
of the basis that you may claim the credit on is 4/5 (that is, 1
minus $20,000/$100,000). Subsidized energy financing means
financing provided under a federal, state, or local program, a
principal purpose of which is to provide subsidized financing for
projects designed to conserve or produce energy.
For periods after December 31, 2008, there is no basis
reduction for property financed by subsidized energy financing.
For transitional rules, see the instructions for line 5q.
To qualify, energy property must be constructed,
reconstructed, or erected by the taxpayer. If acquired by the
taxpayer, the original use of such property must begin with the
taxpayer. The property must meet the performance and quality
standards, if any, that have been prescribed by regulations and
are in effect at the time the property is acquired. For periods
before February 14, 2008, energy property does not include any
property that is public utility property as defined by section
46(f)(5) (as in effect on November 4, 1990), and related
regulations.
You must reduce the depreciable basis by 50% of the
energy credit determined.
You also must reduce the basis of energy property by any
amount attributable to qualified rehabilitation expenditures.

Line 5a and Line 11a
Enter the basis of any property using geothermal energy placed
in service during the tax year. Geothermal energy property is
equipment that uses geothermal energy to produce, distribute,
or use energy derived from a geothermal deposit (within the
meaning of section 613(e)(2)). For electricity produced by
geothermal power, equipment qualifies only up to, but not
including, the electrical transmission stage.

Line 5b and Line 11b
Enter the basis of any property using solar energy placed in
service during the tax year. There are two types of property.
1. Equipment that uses solar energy to illuminate the inside
of a structure using fiber-optic distributed sunlight.
2. Equipment that uses solar energy to:
• Generate electricity,
• Heat or cool (or provide hot water for use in) a structure,
or
• Provide solar process heat (but not to heat a swimming
pool).

Line 5c, Line 5f, and Line 11c
Enter the basis of any qualified fuel cell property placed in
service during the tax year as follows.
• Line 5c, if your tax year began before October 4, 2008, and
the property was placed in service before October 4, 2008,
• Line 5f, if your tax year began before October 4, 2008, and
the property was placed in service after October 3, 2008, and
• Line 11c, if your tax year began after October 3, 2008.
Qualified fuel cell property is a fuel cell power plant that
generates at least 0.5 kilowatt of electricity using an
electrochemical process and has electricity-only generation
efficiency greater than 30 percent. See section 48(c)(1) for
further details.

-2- grants under section 1603 of the American Recovery and Reinvestment
Energy property that qualifies for renewable energy
Tax Act of 2009 is not eligible for the energy credit for the tax year that the grant is made or any subsequent tax year.

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Instructions for Form 3468

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• Whose construction, reconstruction, or erections is

Transitional rule.

completed after December 31, 2008,
• Acquired and placed in service after December 31, 2008, and
• Only to the extent of the qualified investment (as determined
under section 46(c) and (d) as in effect on November 4, 1990)
with respect to qualified progress expenditures made after
December 31, 2008.

Enter only the basis attributable to the periods after October 3,
2008, for property:
• Whose construction, reconstruction, or erections is
completed after October 3, 2008,
• Acquired and placed in service after October 3, 2008, and
• Only to the extent of the qualified investment (as determined
under section 46(c) and (d) as in effect on November 4, 1990)
with respect to qualified progress expenditures made after
October 3, 2008.

Line 5r and Line 11o
Enter the basis of any geothermal heat pump system placed in
service after October 3, 2008. Geothermal heat pump systems
constitute equipment which uses the ground or ground water as
a thermal energy source to heat a structure or as a thermal
energy sink to cool a structure. For details, see section
48(a)(3)(A)(vii).
For transitional rules, see the instructions for line 5c, line 5f,
and line 11c.

Line 5i and Line 11f
Enter the basis of any qualified microturbine property placed in
service during the tax year. Qualified microturbine property is a
stationary microturbine power plant which generates less than
2,000 kilowatts and has an electricity-only generation efficiency
of not less than 26 percent at International Standard
Organization conditions. See section 48(c)(2) for further details.

Line 5s and 11p

Line 5l and Line 11i
Enter the basis of any qualified combined heat and power
system property placed in service after October 3, 2008.
Combined heat and power system property is property that
uses the same energy source for the simultaneous or
sequential generation of electrical power, mechanical shaft
power, or both, in combination with the generation of steam or
other forms of useful thermal energy (including heating and
cooling applications), the energy efficiency percentage of which
exceeds 60 percent, that produces:
• At least 20 percent of its total useful energy in the form of
thermal energy that is not used to produce electrical or
mechanical power (or a combination thereof), and
• At least 20 percent of its total useful energy in the form of
electrical or mechanical power (or a combination thereof).
For details, see section 48(c)(3).
Energy efficiency percentage. The energy efficiency
2012,
percentage of a combined heat and power system property is
the fraction – the numerator of which is the total useful
electrical, thermal, and mechanical power produced by the
system at normal operating rates, and expected to be
consumed in its normal application, and the denominator of
which is the lower heating value of the fuel sources for the
system. The energy efficiency percentage is determined on a
Btu basis.
Combined heat and power system property does not include
property used to transport the energy source to the facility or to
distribute energy produced by the facility.
Biomass systems. Systems designed to use biomass for at
least 90 percent of the energy source are eligible for a credit
that is reduced in proportion to the degree to which the system
fails to meet the efficiency standard. For more information, see
section 48(c)(3)(D).
For transitional rules, see the instructions for line 5c, line 5f,
and line 11c.

Line 5o and Line 11l

Enter the basis of any qualified investment credit facility
property placed in service after December 31, 2008. Qualified
investment credit facility property is property for which
depreciation or amortization is allowable and is tangible
personal property or other tangible property (not including a
building or its structural components), but only if the property is
used as an integral part of the qualified investment credit
facility. See section 48(a)(5) for details.
A qualified investment credit facility is any of the following
facilities if no credit has been allowed under section 45 for that
facility and an irrevocable election was made to treat the
qualified facility as energy property.
• Wind facilities under section 45(d)(1) if the facility is placed in
service in 2009, 2010, 2011, or 2012,
• Any qualified facility under section 45(d)(2), (3), (4), (6), (7),
(9), or (11), if that facility is placed in service in 2009, 2010,
2011, or 2013.

Part II. Qualifying advanced coal project credit
A qualifying advanced coal project is a project that:
• Uses advanced coal-based generation technology (as
defined in section 48A(f)) to power a new electric generation
unit or to refit or repower an existing electric generation unit
(including an existing natural gas-fired combined cycle unit),
• The fuel input for the project, when completed, will be at least
75 percent coal,
• The electric generation unit or units at the project site will
generate at least 400 megawatts,
• A majority of the output of the project is reasonably expected
to be acquired or utilized,
• The taxpayer provides evidence of ownership or control of a
site of sufficient size to allow the proposed project to be
constructed and to operate on a long-term basis,
• The project will be located in the United States, and
• Includes equipment that separates and sequesters at least
65 percent (70 percent if the credit is later reallocated) of the
project’s total carbon dioxide emissions for project applications
described in section 48A(d)(2)(A)(ii).

Basis

Enter the basis of any qualified small wind energy property
placed in service after October 3, 2008, and before January 1,
2009. Qualified small wind energy property means property that
uses a qualifying small wind turbine to generate property. For
this purpose, a qualifying small wind turbine means a wind
turbine which has a nameplate capacity of not more than 100
kilowatts. For details, see section 48(c)(4).
For transitional rules, see the instructions for line 5c, line 5f,
and line 11c.

The basis of property may have to be reduced for certain
financing received under rules similar to section 48(a)(4) and
described in the first paragraph under Energy Credit.
Qualified investment for any tax year is the basis of eligible
property placed in service by the taxpayer during the tax year
which is part of the qualifying project. Eligible property is limited
to property for which depreciation or amortization is available
and the construction, reconstruction, or erection of which is
completed by the taxpayer, or which is acquired by the taxpayer
if the original use of such property commences with the
taxpayer.

Line 5q and Line 11n
Enter the basis of any qualified small wind energy property
placed in service after December 31, 2008.

Line 6a

Transitional rule.

Enter the basis of any qualifying investment in integrated
gasification combined cycle property placed in service during
the tax year for projects described in section 48A(d)(3)(B)(i).

Enter only the basis attributable to the periods after December
31, 2008, for property:

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Instructions for Form 3468

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• Electric grids to support the transmission of intermittent
sources of renewable energy, including storage of the energy,
• Property designed to capture and sequester carbon dioxide
emissions,
• Property designed to capture and sequester carbon dioxide
emissions,
• Property designed to refine or blend renewable fuels or to
produce energy conservation technologies (including
energy-conserving lighting technologies and smart grid
technologies),
• New qualified plug-in electric drive motor vehicles (as defined
in section 30D), qualified plug-in electric vehicles (as defined in
section 30(d)), or components which are designed specifically
for use with those vehicles, including electric motors,
generators, and power control units, or
• Other advanced energy property designed to reduce
greenhouse gas emissions, and
• Any portion of the qualified investment that is certified by the
IRS under section 48C(d).
Qualified advanced energy project does not include any
portion of a project for the production of any property that is
used in the refining or blending of any transportation fuel (other
than renewable fuels).

Eligible property is any property which is part of a qualifying
advanced coal project using an integrated gasification
combined cycle and is necessary for the gasification of coal,
including any coal handling and gas separation equipment.
Integrated gasification combined cycle is an electric
generation unit which produces electricity by converting coal to
synthesis gas, which in turn is used to fuel a combined-cycle
plant to produce electricity from both a combustion turbine
(including a combustion turbine/fuel cell hybrid) and a steam
turbine.

Line 6b
Enter the basis of any qualifying investment in advanced
coal-based generation technology property placed in service
during the tax year for projects described in section
48A(d)(3)(B)(ii). Eligible property is any property which is part of
a qualifying advanced coal project (defined above) not using an
integrated gasification combined cycle.

Line 6c
Enter the basis of any qualifying investment in advanced
coal-based generation technology property placed in service
during the tax year for projects described in section
48A(d)(3)(B)(iii). Eligible property is any certified property
located in the United States and which is part of a qualifying
advanced coal project (defined above) which has equipment
that separates and sequesters at least 65 percent of the
project’s total carbon dioxide emissions. This percentage
increases to 70 percent if the credits are later reallocated by the
IRS.
The credit will be recaptured if a project fails to attain or
maintain the carbon dioxide separation and sequestration
requirements. For details, see section 48A(i).

Eligible property.
Eligible property is property that is necessary for the production
of property described in section 48C(c)(1)(A)(i), for which
but
depreciation or amortization is available and is tangible
personal property or other tangible personal property (not
including a building or its structural components), ut only if the
property is used as an integral part of the qualified investment
credit facility.

Transitional rule.

Part II. Qualifying gasification project credit

Enter only the basis attributable to the periods after February
17, 2009, for property:
• Whose construction, reconstruction, or erections is
completed after February 17, 2009,
• Acquired and placed in service after February 17, 2009, and
• Only to the extent of the qualified investment (as determined
under section 46(c) and (d) as in effect on November 4, 1990)
with respect to qualified progress expenditures made after
February 17, 2009.

A qualifying gasification project is a project:
• Employing gasification technology (as defined in section
48B(c)(2)), and
• Carried out by an eligible entity (as defined in section
48B(c)(7)).
The total amount of credits that may be allocated under the
qualifying gasification project program may not exceed
$650,000,000.

Line 8b and Line 12. Credit From Section 1381(a)
Cooperatives

Line 7a
Enter the basis of the qualified investment in qualifying
gasification project property (defined above) placed in service
during the tax year for which credits were allocated or
reallocated after October 3, 2008, and that include equipment
that separates and sequesters at least 75% of the project’s
carbon dioxide emissions.
For purposes of this credit, eligible property includes any
property that is part of a qualifying gasification project and
necessary for the gasification technology of such project. The
IRS is required to recapture the benefit of any allocated credit if
a project fails to attain or maintain these carbon dioxide
separation and sequestration requirements. See section 48B(f).

Patrons, including cooperatives that are patrons in other
cooperatives, enter the unused investment credit allocated from
cooperatives. If you are a cooperative, see the Instructions for
Form 3800, line 1a, for allocating the investment credit to your
patrons.

Part III. Rehabilitation Credit
You are allowed a credit for qualified rehabilitation expenditures
made for any qualified rehabilitated building. You must reduce
your depreciable basis by the amount of the credit.
If the adjusted basis of the building is determined in whole or
in part by reference to the adjusted basis of a person other than
the taxpayer, see Regulations section 1.48-12(b)(2)(viii) for
additional information that must be attached.

Line 7b
Enter the basis of the qualified investment, other than line 7a, in
qualifying gasification project property (defined above) placed in
service during the tax year.

Qualified rehabilitated building
To be a qualified rehabilitated building, your building must meet
all five of the following requirements.
1. The building must have been placed in service (see
requirement 4) prior to 1936 unless it is a certified historic
structure. A certified historic structure is any building (a) listed in
the National Register of Historic Places, or (b) located in a
registered historic district (as defined in section 47(c)(3)(B)) and
certified by the Secretary of the Interior as being of historic
significance to the district. Certification requests are made
through your State Historic Preservation Officer on National
Park Service (NPS) Form 10-168a, Historic Preservation
Certification Application. The request for certification should be
made prior to physical work beginning on the building.

Line 8a. Qualifying Advanced Energy Project
Credit
Enter the basis of any eligible property placed in service after
February 17, 2009, that is part of a qualifying advanced energy
project. Qualified advanced energy project means a project that
re-equips, expands, or establishes a manufacturing facility for
the production of:
• Property designed to be used to produce energy from the
sun, wind, geothermal deposits (within the meaning of section
613(e)(2)), or other renewable resources,
• Fuel cells, microturbines, or an energy storage system for
use with electric or hybrid-electric motor vehicles,

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Instructions for Form 3468

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2. The building must be substantially rehabilitated. A
building is considered substantially rehabilitated if your qualified
rehabilitation expenditures during a self-selected 24-month
period that ends with or within your tax year are more than the
greater of $5,000 or your adjusted basis in the building and its
structural components. Figure adjusted basis on the first day of
the 24-month period or the first day of your holding period,
whichever is later. If you are rehabilitating the building in
phases under a written architectural plan and specifications that
were completed before the rehabilitation began, substitute
“60-month period” for “24-month period.” If the building is in one
of the designated counties or parishes in the GO Zone, Rita GO
Zone, or Wilma GO Zone, the “24-month period” and “60-month
period” is extended by 12 months. However, the rehabilitation
must have begun, but not been completed, and the building
placed in service prior to the following dates.
States

registered historic district, the rehabilitation must be certified by
the Secretary of the Interior as being consistent with the historic
character of the property or district in which the property is
located. This requirement does not apply to a building in a
registered historic district if (a) the building is not a certified
historic structure, (b) the Secretary of the Interior certifies that
the building is not of historic significance to the district, and (c) if
the certification in (b) occurs after the rehabilitation began, the
taxpayer certifies in good faith that he or she was not aware of
that certification requirement at the time the rehabilitation
began.
6. The expenditures cannot include any costs allocable to
the part of the property that is (or may reasonably expect to be)
tax-exempt use property (as defined in section 168(h)).
For credit purposes, the expenditures are generally taken
into account for the tax year in which the qualified rehabilitated
building is placed in service. However, with certain exceptions,
you may elect to take the expenditures into account for the tax
year in which they were paid (or, for a self-rehabilitated building,
when capitalized) if (a) the normal rehabilitation period for the
building is at least 2 years, and (b) it is reasonable to expect
that the building will be a qualified rehabilitated building when
placed in service. For details, see section 47(d). To make this
election, check the box on line 10a.
The credit, as a percent of expenditures paid or incurred
during the tax year for any qualified rehabilitated building,
depends on the type of structure and its location.
Note. The credit is increased for qualified rehabilitated
expenditures made on or after the applicable disaster date for
qualified rehabilitated buildings or structures damaged or
destroyed as a result of the severe storms, tornados, or flooding
in the Midwestern disaster area. For details on the affected
counties and the applicable disaster dates in the Midwestern
disaster area, see Tables 1 and 2 in Publication 4492-B,
Information for Affected Taxpayers in the Midwestern Disaster
Areas.

Date

GO Zone

Florida

August 24, 2005

GO Zone

Louisiana, Mississippi, August 29, 2005
and Alabama

Rita GO Zone

Louisiana and Texas

September 23, 2005

Wilma GO Zone

Florida

October 23, 2005

3. Depreciation must be allowable with respect to the
building. Depreciation is not allowable if the building is
permanently retired from service. If the building is damaged, it
is not considered permanently retired from service where the
taxpayer repairs and restores the building and returns it to
actual service within a reasonable period of time.
For a building damaged in the GO Zone, Rita GO Zone, or
Wilma GO Zone, that reasonable period is deemed to be up to
36 months, subject to the following qualifications.
• The building must have been placed in service prior to
the date as given in the table above.
• The relevant 36-month period for that building starts on
the same date as given in the table above.
• Beginning no later than August 15, 2006, for GO Zone,
Rita GO Zone, or Wilma GO Zone property, the taxpayer must
be engaged in the repair or restoration of building, defined as:
a. Ongoing physical repairs,
b. Written contracts in place for the repair or restoration to
be completed within the designated 36-month period, or
c. Active negotiation of contracts for the repair or restoration
to be completed within the designated 36-month period, but
only if the contracts are finalized prior to January 1, 2007.
4. The building must have been placed in service before the
beginning of rehabilitation. This requirement is met if the
building was placed in service by any person at any time before
the rehabilitation began.
5. For a building other than a certified historic structure (a)
at least 75% of the external walls must be retained with 50% or
more kept in place as external walls, and (b) at least 75% of the
existing internal structural framework of the building must be
retained in place.

Line

% If the structure is . . . . . . Located . . . . . . . . . . . . . .

10e

13 Other than a certified historic In the GO Zone
structure

10f

13 Other than a certified historic In the Midwestern disaster
structure
area

10g

10 Other than a certified historic Elsewhere than in the GO
structure
Zone or Midwestern disaster
area

10h

26 Certified historic structure

In the GO Zone

10i

26 Certified historic structure

In the Midwestern disaster
area

10j

20 Certified historic structure

Elsewhere than in the GO
Zone or Midwestern disaster
area

For the definition of the GO Zone, see section 1400M and Pub. 4492.
For the definition of the Midwestern disaster area, see Pub. 4492-B.

Qualified rehabilitation expenditures

If you are claiming a credit for a certified historic structure on
lines 10h, 10i, or 10j, enter the assigned NPS project number
on line 10k. If the qualified rehabilitation expenditures are from
an S corporation, partnership, estate, or trust, enter on line 10k
the employer identification number of the pass-through entity
instead of the assigned NPS project number, and skip line 10l
and the instructions below.
Enter the date of the final certification of completed work
received from the Secretary of the Interior on line 10l. If the final
certification has not been received by the time the tax return is
filed for a year in which the credit is claimed, attach a copy of
the first page of NPS Form 10-168a, Historic Preservation
Certification Application (Part 2 — Description of Rehabilitation),
with an indication that it was received by the Department of the
Interior or the State Historic Preservation Officer, together with

To be qualified rehabilitation expenditures, your expenditures
must meet all six of the following requirements.
1. The expenditures must be for (a) nonresidential rental
property, (b) residential rental property (but only if a certified
historic structure — see Regulations section 1.48-1(h)), or (c)
real property that has a class life of more than 12 years.
2. The expenditures must be incurred in connection with the
rehabilitation of a qualified rehabilitated building.
3. The expenditures must be capitalized and depreciated
using the straight line method.
4. The expenditures cannot include the costs of acquiring or
enlarging any building.
5. If the expenditures are in connection with the
rehabilitation of a certified historic structure or a building in a

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Page 6 of 6

Instructions for Form 3468

15:15 - 4-MAR-2009

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

proof that the building is a certified historic structure (or that
such status has been requested). After the final certification of
completed work has been received, file Form 3468 with the first
income tax return filed after receipt of the certification and enter
the assigned NPS project number and the date of the final
certification of completed work on the appropriate lines on the
form. Also attach an explanation, and indicate the amount of
credit claimed in prior years.
You must retain a copy of the final certification of completed
work as long as its contents may be needed for the
administration of any provision of the Internal Revenue Code.
If the final certification is denied by the Department of
Interior, the credit is disallowed for any tax year in which it was
claimed, and you must file an amended return if necessary. See
Regulations section 1.48-12(d)(7)(ii) for details.

Report any carryback of the rehabilitation credit (for tax years
beginning in 2008) and the energy credit (for tax years
beginning after October 3, 2008), on the 2007 Form 6478,
Alcohol and Cellulosic Biofuels Fuels Credit, line 10, and enter
“ITC” to the left of the entry space.
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.
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.
The time needed to complete and file this form will vary
depending on individual circumstances. The estimated burden
for individual taxpayers filing this form is approved under OMB
control number 1545-0074 and is included in the estimates
shown in the instructions for their individual income tax return.
The estimated burden for all other taxpayers who file this form
is shown below:

Line 14
Enter the amount included on line 13 that is from a passive
activity. Generally, a passive activity is a trade or business in
which you did not materially participate. Rental activities are
generally considered passive activities, whether or not you
materially participate. For details, see Form 8582-CR, Passive
Activity Credit Limitations (for individuals, trusts, and estates),
or Form 8810, Corporate Passive Activity Loss and Credit
Limitations (for corporations).

Line 16
Enter the passive activity credit allowed for the 2008
rehabilitation credit and the energy credit for tax years
beginning after October 3, 2008, from Form 8582-CR or Form
8810.

Recordkeeping . . . . . . . . . . . . . . . . . . . . . . . .26
.

13 hr.,18
9 min.
hrs.,
min.
3
hr.,
34
min.
hrs., 21 min.
Preparing and sending the form to the IRS . . . . .10
. hrs.,
3 hr., 57
40min.
min.

Line 17

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.

Learning about the law or the form . . . . . . . . . . . 6

Use line 17 to show any carryback of the rehabilitation and
energy credits if you amend your 2008 return to carry back an
unused credit from 2009.
Note. Report any carryforward for years prior to 2008 of the
rehabilitation credit and for years beginning before October 4,
2008, of the energy credit on the Form 3800 carryforward line.

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