What Texas Form 05-179 (2025) Is For
Texas Form 05-179 is used to notify the Texas Comptroller of Public Accounts when a historic structure credit is sold, assigned, or allocated to another entity. The form documents changes in ownership of a landmark structure credit so the Comptroller can track who is entitled to claim the credit on applicable tax reports.
The historic structure credit is available for certified historic structures that complete a certified rehabilitation in compliance with the Secretary of the Interior's Standards for Rehabilitation. The credit is generally equal to 25 percent of qualified rehabilitation expenditures and may be applied against Texas Franchise Tax or insurance premium tax reports.
When You’d Use Texas Form 05-179
A reporting entity must file Texas Form 05-179 when any portion of a historic structure credit changes ownership. The form is required whether the transaction involves a sale between unrelated Texas businesses or an allocation among flow-through entities.
Everyday situations that require filing include the following:
- A Texas company subject to franchise tax purchases a historic structure credit from a taxable entity.
- Credits are distributed among owners with an ownership interest in a partnership or joint venture.
- Members of a limited liability company receive credits in accordance with an operating agreement. A liability company distributes credits to members under an operating agreement.
- Under the subchapter S rule, an S corporation distributes credits to its shareholders.
- Before it expires, a credit is transferred several times.
The Texas Tax Code requires the form to be filed within 30 days of the transaction date. Although late filing is allowed, the buyer must wait for the Comptroller to process the transfer and issue an updated certificate before they can claim the credit.
Key Rules or Details for 2025
Both parties in the transaction must complete and submit Texas Form 05-179. Both the buyer and the seller are responsible for ensuring that all information on the form is accurate
Essential rules that apply for the 2025 tax year include the following:
- Only certified historic buildings that are either recognized as Recorded Texas Historic Landmarks or listed in the National Register of Historic Places are eligible for the credit.
- Credits are determined by qualifying rehabilitation costs that have been authorized by cost certification.
- The credit does not extend or reset its expiration when transferred.
- The Texas Insurance Code places particular limitations on insurance premium tax reports.
- If otherwise permitted by Texas law, tax-exempt entities are eligible to participate.
The credit remains valid for six consecutive tax years, beginning with the tax year in which the historic structure is placed in service. Multiple transfers do not affect the original expiration schedule.
Step-by-Step (High Level)
Step 1: Confirm Eligibility
The seller states that the historic property is eligible and that a valid Form 05-901 Historic Structure Credit Certificate is on file.
Step 2: Determine the Credit Amount
The parties confirm that the credit being transferred does not exceed the available balance indicated on the current certificate and agree on the amount.
Step 3: Complete Texas Form 05-179
Both parties complete the form, which includes credit amounts before and after the transfer, entity names, transaction dates, and federal tax identification numbers.
Step 4: Submit Required Documentation
The Texas Comptroller of Public Accounts in Austin, TX, receives the completed form, along with the current Form 05-901 and any other certification records that accompany it.
Step 5: Await Updated Certificates
The Comptroller issues updated certificates reflecting the revised credit balances for both the seller and buyer.
Common Mistakes and How to Avoid Them
- Missing required signatures: Ensure both parties sign the same form before submission so the transfer can be processed.
- Filing after the deadline: Submit within the 30-day window for each transaction so the buyer can claim the credit without delay.
- Transferring more credit than available: Verify the current credit balance on the most recent certificate before calculating the amount to be transferred.
- Omitting supporting documentation: Include all required supporting documents with the filing to prevent resubmission requests and processing delays.
- Assuming the transfer extends the credit period: Track the original placed-in-service date, as the expiration timeline remains unchanged when the credit is transferred.
What Happens After You File
After you submit the transaction, the Texas Comptroller reviews it to ensure it complies with the rules of the Texas Tax Code. This review ensures that the expenses are legitimate, that the ownership information is accurate, and that the new certificate is consistent with previous ones.
After getting the green light, the Comptroller sends both parties updated Tax Credit Certificates. The buyer can then use the credit on a Texas Franchise Tax Report, a No Tax Due Report, or any other insurance premium tax reports that apply. The credit must be reported on the proper schedules and included with the tax return for the relevant years.
FAQs
Who must file Texas Form 05-179?
Any taxable entity involved in selling, assigning, or allocating a historic structure credit must file the form jointly with the other party.
Can only part of the credit be transferred?
Yes, a reporting entity can move any part of the available credit, as long as the remaining balance is reported correctly.
Does the form apply to real estate partnerships?
Yes, joint ventures, partnerships, and other flow-through entities may allocate credits using this form.
Can insurance companies use transferred credits?
Taxpayers who pay insurance premiums can only use credits they get from selling or assigning them, not credits they make themselves.
Is an amended filing allowed?
There is no formal process for changing the law in Texas, but late filing is acceptable to correct transfers that weren't reported.
Does the credit affect income tax?
The historic structure credit is only for franchise tax and insurance premium tax reports, and it doesn't lower your federal income tax bill.
