What Texas Form 05-179 Is For
Notifying the Texas Comptroller of Public Accounts of the sale, assignment, or allocation of a historic structure credit to another taxable entity is done through Texas Form 05-179. Changes in ownership of a rehabilitation credit obtained from a certified landmark structure are recorded on the form.
The Texas Comptroller can issue appropriately updated Tax Credit Certificates and monitor historical structure credit balances by submitting this form. The ownership interest and remaining credit amounts associated with eligible landmark properties are accurately reflected in these certificates.
When You’d Use Texas Form 05-179
When taxpayers sell, assign, or give away all or part of a historic structure credit, they use Texas Form 05-179. These transfers often happen after landmark properties used for real estate or income-generating activities have been certified for rehabilitation.
The form applies to taxable entities such as Limited Liability Companies, partnerships, S corporations, trust companies, and other entities subject to Texas Franchise Tax or insurance premium tax reports. It must be filed within 30 days of the transaction date to allow the recipient to claim the credit on future tax reports.
Key Rules or Details for 2019
Texas Form 05-179 must be signed by both the transferring party and the recipient to be accepted by the Texas Comptroller of Public Accounts. The current Form 05-901 Tax Credit Certificate must be submitted with the form.
The six-year carry-forward period does not reset with each transfer, even though historic structure credits may be transferred multiple times. Depending on the type of taxpayer, the credit may only be used to offset tax liabilities reported on Texas Franchise Tax Reports or Insurance Premium Tax Reports.
For pass-through entities, allocations do not need to match ownership interest, total revenue, or gross receipts percentages. Insurance companies may only use credits acquired through purchase or assignment and may not claim credits they established or received through allocation.
Step-by-Step (High Level)
Before filling out Texas Form 05-179, both parties should confirm the amount of historic structure credit being transferred and ensure that the rehabilitation costs have been appropriately certified. The seller should also ensure that both the Certificate of Eligibility and the cost certification are approved.
The general filing process includes the following steps:
- For internal use, the seller collects the most recent versions of Form 05-901, the Certificate of Eligibility, and the cost certification records.
- The transaction date, credit amounts transferred and retained, and identifying information are all included in Texas Form 05-179, which both parties fill out.
- Both parties sign the form to confirm agreement with the reported transaction details.
- Within 30 days following the transfer, the Division of Revenue receives the completed Form 05-179 and the current Form 05-901 by mail.
- Each party keeps copies for future use and tax return preparation.
After processing, the Texas Comptroller issues new Tax Credit Certificates that reflect the updated balances for each party.
Common Mistakes and How to Avoid Them
- Missing the 30-day filing deadline: File as soon as the transaction is completed so updated Tax Credit Certificates can be issued without delay.
- Submitting Form 05-179 without the current Form 05-901: Attach the most recent Form 05-901 with Form 05-179 so the transfer can be processed and recorded correctly.
- Claiming the credit before the updated certificate is issued: Wait to apply the credit on tax returns or tax reports until the Texas Comptroller issues the new certificate reflecting the transfer.
- Providing incomplete or mismatched entity information: Ensure names, identification numbers, and transaction details match Texas Comptroller records to prevent processing holds.
- Skipping a final reconciliation of credit amounts: Confirm the transferred and retained balances reconcile exactly to the certificate amount before submission.
What Happens After You File
The Texas Comptroller of Public Accounts checks the accuracy and completeness of Form 05-179 after it is received. This review verifies signatures, credit amounts, and whether the information matches what was previously filed.
Once they receive the go-ahead, the Comptroller sends each party a new Form 05-901 certificate that shows the amount of credit remaining on their historic structure. These certificates let you use the credit to pay off eligible tax debts for the tax years that are still carried forward.
If there are issues with the processing, the Comptroller may request additional information or clarification to ensure the review is complete. Due to privacy rules, only the person currently holding the credit can request copies of issued certificates. The holder is allowed to request copies of issued certificates due to confidentiality regulations.
Questions and Answers
Can only part of a historic structure credit be sold or assigned?
Yes, Texas law allows taxpayers to transfer all or part of a historic structure credit, provided the amounts are clearly reported on Texas Form 05-179 and reconcile with the existing certificate balance.
How many times can a historic structure credit be transferred?
There is no statutory limit on the number of transfers. Each transaction requires a separate Form 05-179 filing within the required 30-day timeframe.
Does transferring the credit extend the carry-forward period?
No, the six-year carry-forward period begins when the certified historic structure is placed in service and remains in effect even if the credit is transferred.
Can partnerships allocate credits unevenly among owners?
Yes, partnerships, Limited Liability Companies, and S corporations may allocate credits without regard to ownership interest or gross receipts, provided the recipient is a taxable entity.
When can a buyer use the credit after purchase?
The buyer may use the credit on Texas Franchise Tax Reports or insurance premium tax reports after receiving the updated Tax Credit Certificate from the Comptroller.
What happens if Texas Form 05-179 is filed after the due date?
Late filing does not invalidate the transfer; however, it delays the issuance of the new certificate and postpones the recipient’s ability to claim the credit.
Do federal rules affect Texas historic structure credits?
Texas historic structure credits operate independently from federal section 47 credits, although both rely on Certified Rehabilitation standards issued by the federal Secretary of the Interior.
