Form 6478 Alcohol and Cellulosic Biofuel Fuels Credit.

Form

6478

Alcohol and Cellulosic Biofuel Fuels Credit
(Including Second Generation Biofuel)

OMB No. 1545-0231

2012

▶ Attach

to your tax return.
▶ Information about Form 6478 and its instructions is at www.irs.gov/form6478.

Department of the Treasury
Internal Revenue Service

Attachment
Sequence No. 83

Identifying number

Name(s) shown on return

Reserved
(a)
Number of Gallons
Sold or Used

Type of Fuel

1

Reserved .

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1

2

Reserved .

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2

3

Reserved .

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3

4
5

Reserved . . . . . . . . . . . . . . . . . .
Qualified cellulosic biofuel production for fuel sold or used
before January 3, 2013 (see instructions for election) . . .
Qualified second generation biofuel production for fuel sold or
used after January 2, 2013 (see instructions for election) . .

4

6

7
8
9

10
11

(c)
Column (a) x Column (b)

(b)
Rate

5

$1.01

6

$1.01

Add the amounts in column (c) on lines 5 and 6. Include this amount in your income for 2012, and
enter your IRS registration number (see instructions)
. . . .
Alcohol and cellulosic biofuel fuels credit from partnerships, S corporations, cooperatives, estates,
and trusts (see instructions) . . . . . . . . . . . . . . . . . . . . . . . .
Add lines 7 and 8. Cooperatives, estates, and trusts, go to line 10. Partnerships and S
corporations, stop here and report this amount on Schedule K. All others, stop here and report
this amount on Form 3800, line 4c . . . . . . . . . . . . . . . . . . . . .
Amount allocated to patrons of the cooperative or beneficiaries of the estate or trust (see
instructions) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cooperatives, estates, and trusts, subtract line 10 from line 9. Report this amount on Form 3800,
line 4c . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

7
8

9
10
11

Reserved
For Paperwork Reduction Act Notice, see instructions.

Cat. No. 13605J

Form 6478 (2012)

Page 2

Form 6478 (2012)

General Instructions
Section references are to the Internal Revenue Code
unless otherwise noted.

Future Developments
For the latest information about developments related to
Form 6478 and its instructions, such as legislation
enacted after they were published, go to
www.irs.gov/form6478.

What's New
• The alcohol mixture, alcohol, and small ethanol
producer credits expired for fuels sold or used after 2011.
• The cellulosic biofuel producer credit was extended to
cover fuel sold or used through January 2, 2013.
• A second generation biofuel producer credit adds
algae-based fuel and covers fuel sold or used after
January 2, 2013, and before January 1, 2014.

Purpose of Form
Use Form 6478 to figure your alcohol and cellulosic
biofuel fuels credit. You claim the credit for the tax year in
which the sale or use occurs. This credit consists of the:
• Cellulosic biofuel producer credit, and
• Second generation biofuel producer credit.
You may claim or elect not to claim the alcohol and
cellulosic biofuel fuels credit at any time within 3 years
from the due date of your return (determined without
regard to extensions) on either an original or an amended
return for the tax year of the sale or use.
Taxpayers, other than partnerships, S corporations,
cooperatives, estates, or trusts, whose only source of this
credit is from those pass-through entities, are not
required to complete or file this form. Instead, they can
report this credit directly on Form 3800.

Qualified Cellulosic Biofuel Production
This is cellulosic biofuel which 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 cellulosic biofuel 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 cellulosic biofuel at retail to another
person and puts the cellulosic biofuel in the retail buyer’s
fuel tank; or
2. Is used or sold by the producer for any purpose
described in (1) above.
Qualified cellulosic biofuel production does not include
purchasing alcohol and increasing the proof of the
alcohol through additional distillation. Nor does it include
cellulosic biofuel that is not both produced in the United
States or a U.S. possession and used as a fuel in the
United States or a U.S. possession.
A qualified cellulosic biofuel mixture combines
cellulosic biofuel with gasoline or a special fuel. The
producer of the mixture either:

• Used it as a fuel, or
• Sold it as fuel to another person.

Cellulosic Biofuel
Generally, cellulosic biofuel, for credit purposes, is any
liquid fuel, which:
• Is produced from any lignocellulosic or hemicellulosic
matter that is available on a renewable or recurring basis,
• Meets the registration requirements for fuels and fuel
additives established by the Environmental Protection
Agency under section 211 of the Clean Air Act (42 U.S.C.
7545), and
• Is not alcohol of less than 150 proof. In figuring the
proof of any alcohol, disregard any added denaturants
(additives that make the alcohol unfit for human
consumption).
However, cellulosic biofuel does not include any fuel if:
• More than 4% of the fuel (determined by weight) is any
combination of water and sediment,
• The ash content of the fuel is more than 1%
(determined by weight), or
• The fuel has an acid number greater than 25.

Qualified Second Generation Biofuel
Production
This is second generation biofuel which 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 second generation biofuel
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 second generation biofuel at retail to
another person and puts the second generation biofuel in
the retail buyer’s fuel tank; or
2. Is used or sold by the producer for any purpose
described in (1) above.
Qualified second generation biofuel production does
not include purchasing alcohol and increasing the proof
of the alcohol through additional distillation. Nor does it
include second generation biofuel that is not both
produced in the United States or a U.S. possession and
used as a fuel in the United States or a U.S. possession.
A qualified second generation biofuel mixture combines
second generation biofuel with gasoline or a special fuel.
The producer of the mixture either:
• Used it as a fuel, or
• Sold it as fuel to another person.

Second Generation Biofuel
Generally, second generation biofuel, for credit purposes,
is any liquid fuel, which:
• Is derived by, or from, qualified feedstocks,

Page 3

Form 6478 (2012)

• Meets the registration requirements for fuels and fuel
additives established by the Environmental Protection
Agency under section 211 of the Clean Air Act (42 U.S.C.
7545), and
• Is not alcohol of less than 150 proof. In figuring the
proof of any alcohol, disregard any added denaturants
(additives that make the alcohol unfit for human
consumption).
A qualified feedstock is:
• Any lignocellulosic or hemicellulosic matter that is
available on a renewable or recurring basis, and
• Any cultivated algae, cyanobacteria, or lemna.
However, second generation biofuel does not include
any fuel if:
• More than 4% of the fuel (determined by weight) is any
combination of water and sediment,
• The ash content of the fuel is more than 1%
(determined by weight), or
• The fuel has an acid number greater than 25.
Special rules for algae. For sales described in (1) under
Qualified Second Generation Biofuel Production, earlier,
second generation biofuel also includes certain liquid fuel,
which:
• Is derived by, or from, any cultivated algae,
cyanobacteria, or lemna, and
• Is not alcohol of less than 150 proof (disregard any
added denaturants).
But only if this fuel is sold by the producer to another
person for refining by such other person into a liquid fuel
which will meet the registration requirements for fuels and
fuel additives established by the Environmental Protection
Agency under section 211 of the Clean Air Act (42 U.S.C.
7545), and not include any fuel if:
• More than 4% of the fuel (determined by weight) is any
combination of water and sediment,
• The ash content of the fuel is more than 1%
(determined by weight), or
• The fuel has an acid number greater than 25.
Also, once this fuel is sold by the producer to another
person for refining by such person into a fuel which will
meet these requirements, neither the producer nor any
other person can use such fuel (or any fuel derived from
such fuel) to figure a second credit for qualified second
generation biofuel production.

Registration
All producers of cellulosic or second generation biofuel
must be registered with the IRS. See Form 637,
Application for Registration.

Recapture of Credit
You must pay a tax on each gallon of cellulosic or second
generation biofuel at the rate you used to figure the credit
if you do not use the fuel for the purposes described
under Qualified Cellulosic Biofuel Production or Qualified
Second Generation Biofuel Production, earlier.
Report the tax on Form 720.

Specific Instructions
Lines 1 Through 4
These lines are reserved for future use.

Line 5
Enter the number of gallons of cellulosic biofuel sold or
used before January 3, 2013, that meets the conditions
listed under Qualified Cellulosic Biofuel Production,
earlier. Multiply by the rate of $1.01 per gallon.

Line 6
Enter the number of gallons of second generation biofuel
sold or used after January 2, 2013, that meets the
conditions listed under Qualified Second Generation
Biofuel Production, earlier. Multiply by the rate of $1.01
per gallon.

Line 7
The total credit shown in column (c) on lines 5 and 6 must
be included in income under “other income” on the
applicable line of your income tax return, even if you
cannot use all of the credit because of the tax liability
limit. However, if you are subject to the alternative
minimum tax (AMT), this amount is not income in figuring
AMT and must be subtracted when figuring your
alternative minimum taxable income. Do this by including
this amount on line 27 of Form 6251, line 23 of Schedule I
(Form 1041), or line 2o of Form 4626.
Registration number. To claim a cellulosic or second
generation biofuel producer credit on line 5 or line 6, you
must be registered with the IRS. Enter your CB
registration number in the space provided. For more
information, see Form 637 and Publication 510, Excise
Taxes.

Line 8
Enter the amount of credit that was allocated to you as a
partner, shareholder, patron of a cooperative, or
beneficiary.
If your credit from a pass-through entity includes the
small ethanol producer credit, you, as a partner,
shareholder, patron, or beneficiary, are subject to the 15million-gallon production limitation and the 60-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.

Line 10
Estate or trust. Allocate the alcohol and cellulosic biofuel
fuels credit on line 9 between the estate or trust and the
beneficiaries in the same proportion as income was
allocated and enter the beneficiaries’ share on line 10.
If the estate or trust is subject to the passive activity
rules, include on line 8 any alcohol and cellulosic biofuel
fuels credits from passive activities disallowed for prior
years and carried forward to this year. Complete Form
8582-CR, Passive Activity Credit Limitations, to determine
the allowed credit that must be allocated between the
estate or trust and the beneficiaries. For details, see the
Instructions for Form 8582-CR.

Form 6478 (2012)

Cooperative election to allocate the cellulosic or
second generation biofuel producer credit to patrons.
A cooperative described in section 1381(a) can elect to
allocate any part of the cellulosic or second generation
biofuel producer credit to patrons of the cooperative. To
make the election, attach a statement to the effect that
the cooperative elects to allocate the credit pro rata
among the patrons eligible to share in patronage
dividends on the basis of the quantity or value of
business done with or for the patrons for the tax year.
If the cooperative is subject to the passive activity rules,
include on line 8 any small ethanol or cellulosic biofuel
producer credits from passive activities disallowed for
prior years and carried forward to this year. Complete
Form 8810, Corporate Passive Activity Loss and Credit
Limitations, to determine the allowed producer credits
that can be allocated to patrons. For details, see the
Instructions for Form 8810.
The election is not effective unless:
• The statement described above is attached to the timely
filed tax return (including extensions) for the tax year
associated with the election, and
• The cooperative designates the apportionment in a
written notice mailed to its patrons during the payment
period described in section 1382(d).
If you timely filed your return without making an
election, you can still make the election by filing an
amended return within 6 months of the due date of the
return (excluding extensions). Write “Filed pursuant to
section 301.9100-2” on the amended return.
Once made, the election cannot be revoked.

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