What Texas Form 05-179 (2014) Is For
Texas Form 05-179 is used to report the sale, assignment, or allocation of a historic structure credit issued under the Texas historic structure rehabilitation program. The form notifies the Texas Comptroller when ownership of a tax credit connected to a certified historic structure changes.
The credit is only available for certified historic structures that meet both state and federal standards. This includes having a qualified rehabilitation plan approved and adhering to the rules set by the Secretary of the Interior. Once approved, rehabilitation costs for eligible historic properties create a landmark structure credit that can be moved to another property later.
Texas Form 05-179 does not give you the credit. It indicates that ownership has changed after the Certificate of Eligibility and Tax Credit Certificate have already been issued through the standard application process.
When You’d Use Texas Form 05-179
Every time a historic structure credit is sold, assigned, or allocated during a taxable year or fiscal year, Texas Form 05-179 must be submitted. The filing requirement still applies, regardless of whether the transfer is between unrelated Texas companies or between related parties.
Limited Liability Companies, partnerships, S corporation filers under Subchapter S, trust company arrangements, and other taxable entities that are required to pay the Texas Franchise Tax are all examples of entities often involved. You have 30 days from the date of the transaction to send in the form.
Delays keep the person from claiming the credit on their tax returns, but they do not make the transfer invalid. If the first submission had errors about who owns the property, the taxable year, or the costs of fixing up the qualified historic structure, you need to file an amended return.
Key Rules or Details for 2014
Historic structure credits are governed by the Texas Tax Code and coordinated with federal standards under section 47 of the federal Internal Revenue Code. The credit amount is based on certified rehabilitation expenditures verified through cost certification.
Key rules include the following points:
- The credit equals up to 25 percent of eligible rehabilitation costs for a certified historic structure.
- The credit reduces Texas Franchise Tax liability but does not offset federal or state income tax.
- The credit expires after six consecutive tax years, starting with the taxable year in which the structure is placed in service.
- Transferring the credit does not extend or restart the expiration period.
- Rehabilitation expenditures may only be used once to establish a credit.
Insurance companies are subject to additional limitations and may only use credits acquired through purchase. Credits allocated from pass-through entities are not permitted for insurance premium tax purposes.
The credit may be claimed on the Texas Franchise Tax Report, including the Long Form or No Tax Due Report, once the recipient receives an updated Tax Credit Certificate from the Texas Comptroller.
Step-by-Step (High Level)
Step 1: Confirm Credit Eligibility
The historic project must obtain a Certificate of Eligibility attesting to the building's status as a certified historic structure before any transfer takes place. This review assesses adherence to federal regulations, including work on mechanical systems and electrical wiring.
Step 2: Finalize the Transfer Agreement
The credit amount transferred, the date of the transaction, and any financial terms must all be agreed upon by the parties. Bank financing, equity investors, or tiered ownership structures are frequently involved in these transactions.
Step 3: Complete Texas Form 05-179
The form needs to have the correct information about the credit owner, the recipient, and the amounts of credit involved. The balance on the current Tax Credit Certificate must match all of the numbers.
Step 4: Obtain Authorized Signatures
The form must be signed by both the sending and receiving parties. The person signing on behalf of an entity must have documented authority as outlined in corporate resolutions or governing agreements.
Step 5: Submit Required Documentation
Texas Form 05-179 must be submitted with the current Tax Credit Certificate. Processing times vary, and incomplete submissions frequently lead to delays.
Step 6: Claim the Credit on Tax Reports
When a new certificate is issued, the recipient can claim the credit on their tax returns for the applicable years. The credit reduces the Texas Franchise Tax liability by one dollar for every dollar spent, until it is fully utilized or expires.
Common Mistakes and How to Avoid Them
- Missing the 30-day filing deadline: Submit Texas Form 05-179 within 30 days of the transaction date so the transfer is recognized without delaying tax return preparation.
- Reporting incorrect credit amounts: Reconcile the transferred and retained amounts so they equal the balance shown on the Tax Credit Certificate.
- Using unauthorized signatories: Confirm each signer has authority to bind the entity before submission to avoid rejection and resubmissions.
- Overlooking expiration rules: Verify the remaining credit period based on the original placed-in-service taxable year before acquiring or claiming the credit.
- Poor record retention: Retain certificates, qualified rehabilitation plan approvals, cost certifications, and audit support so the credit can be substantiated if reviewed.
What Happens After You File
Following submission, the form is examined by the Texas Comptroller to ensure that it complies with the Historic Structure Rehabilitation Program. Verifying the taxable entities' reported gross receipts, ownership details, and rehabilitation costs is all part of this review.
New Tax Credit Certificates with updated ownership and remaining balances are issued if the application is accepted. When necessary, these certificates must be kept on file and included with subsequent tax reports, such as the Ownership Information Report and the Public Information Report.
If there are problems, the Comptroller may send out a Revenue Notice requesting additional information or corrections. Responding quickly can help taxpayers avoid delays that could change filing deadlines or require more time to file.
FAQs
Who must file Texas Form 05-179 (2014)?
Any reporting entity involved in the sale, assignment, or allocation of a historic structure credit must file the form within 30 days of the transaction date.
Does the historic structure credit reduce income tax liability?
No, the credit applies only to the Texas Franchise Tax and does not reduce federal or state income tax liability.
Can a historic structure credit be sold more than once?
Yes, Texas law allows unlimited sales or assignments during the credit’s life, subject to the six-year expiration period.
Do unused historic structure credits carry forward?
Unused credits may be carried forward until fully used or until the expiration period ends.
Do the rules of other states affect Texas historic structure credits?
No, programs in states such as Rhode Island, Minnesota, North Carolina, New York State, or Kansas do not govern the transfer of credits from Texas.
What records should the buyer retain?
Buyers should retain the Certificate of Eligibility, Tax Credit Certificate, cost certification documentation, and all transfer agreements related to the transaction.
Is there a filing fee for Texas Form 05-179?
No, the Texas Comptroller does not charge a fee for processing Texas Form 05-179.
