What Texas Form 05-179 Is For
Texas Form 05-179 is used to report the sale, assignment, or allocation of an existing historic structure credit that has already been earned and certified. The form officially records changes in credit ownership with the Texas Comptroller of Public Accounts.
The credit applies to certified rehabilitation of a certified historic structure listed in the National Register of Historic Places or otherwise recognized under Historic Preservation programs. The form ensures accurate tracking of tax credit ownership for Texas Franchise Tax and insurance premium tax purposes.
Texas Form 05-179 does not create, increase, or extend a historic structure credit. Its purpose is limited to documenting the transfer so the Texas Comptroller can issue updated credit certificates.
When You’d Use Texas Form 05-179
Texas Form 05-179 must be filed whenever a historic structure credit is sold, assigned, or allocated to another Reporting Entity. This includes transactions involving Texas businesses, joint ventures, and flow-through entities.
Taxable entities must submit the form within 30 days of completing the transfer transaction. The deadline applies regardless of whether the transfer involves a sale for value, a no-payment assignment, or an internal asset allocation.
Late filing does not invalidate the transfer itself. However, the recipient may not claim the credit on a Franchise Tax Report until the Texas Comptroller processes the filing and issues a revised certificate.
Key Rules or Details for 2012
Texas Form 05-179 is needed by the Texas Tax Code when a taxable entity sells, assigns, or allocates a historic structure credit that is linked to a certified historic structure. The Texas Comptroller of Public Accounts typically requires the form to be submitted within 30 days, along with Form 05-901 and proof of the costs.
Limited Liability Companies, S corporations, and other flow-through entities can divide the tax credit among their members based on the operating agreement for Texas Franchise Tax purposes. After a transfer, the limits on the amount of credit and the year that can be taxed remain unchanged. Due to this, it is crucial to file the Texas Franchise Tax Report and other related tax reports on a timely basis.
Step-by-Step (High Level)
Step 1: Confirm certification and available credit
Verify that the historic structure credit has been fully approved and issued, and then check the remaining credit balance and the usable tax years. The seller should confirm the balance using the most recent Form 05-901.
Step 2: Review supporting documentation
The buyer should verify the cost certification and Certificate of Eligibility to confirm eligible expenses. Both parties should verify the documentation supporting the amount of credit being transferred.
Step 3: Complete Texas Form 05-179 accurately
Fill out Form 05-179 with the correct names of the entities, taxpayer numbers, and the agreed-upon amount of credit. Check entries carefully to make sure they don't slow down processing.
Step 4: Sign with original signatures
The same Form 05-179 should be signed by both parties using their original signatures. Rejection or follow-up requests can be avoided by using matching originals.
Step 5: Mail forms and track updated certificates
Send Form 05-179 to the Texas Comptroller in Austin along with the original Form 05-901. The Comptroller updates ownership records and issues revised tax credit certificates with updated balances following review.
Common Mistakes and How to Avoid Them
- Filing late under the 30-day rule: File within 30 days of the transaction date rather than waiting until return prep or document gathering is complete.
- Submitting an incomplete transfer package: Include the signed Texas Form 05-179 and the original Form 05-901 so that the Comptroller can process the transfer.
- Math errors in transferred and retained balances: Confirm that the transferred amount plus any retained balance equals the credit amount on the prior certificate.
- Missing signatures from both parties: Ensure that both parties sign the same form to avoid rejection.
- Using Form 05-179 for initial credit certification: Use Form 05-179 only for post-certification transfers and complete initial accreditation through the appropriate credit process.
What Happens After You File
The Texas Comptroller reviews the submitted paperwork to ensure it is accurate and complies with the rules outlined in the Texas Tax Code. Processing usually takes a few weeks.
The Texas Comptroller sends new Form 05-901 certificates to both parties after they agree. Each certificate shows the new balance of the historic structure credit.
Credits can lower the franchise tax bill by the same amount, but they are only applied after other credits have been used. Unused money can be carried over to the next tax year if it hasn't expired.
FAQs
Can only part of a historic structure credit be sold or assigned?
Yes, partial transfers are permitted under the Texas Tax Code as long as the transferred amount and any retained balance together equal the original historic structure credit shown on Form 05-901.
Does filing Texas Form 05-179 extend the credit expiration date?
No, filing Texas Form 05-179 does not extend the expiration date of the document. The credit always expires based on the original date the certified historic structure was placed in service.
Can nonprofit organizations use this form?
Nonprofit organizations may file Texas Form 05-179 to transfer historic structure credits they earn. However, they generally cannot use the credit themselves because they do not owe the Texas Franchise Tax.
Are federal income tax rules affected by this transfer?
Under federal tax law, the money you make from selling a historic structure credit may be considered income. Taxpayers should consider the effects on their income tax separately when filing their federal taxes.
Can a historic structure credit be transferred more than once?
Yes, you can transfer a historic structure credit more than once before it runs out. Texas Form 05-179 must be used to report each sale, assignment, or allocation correctly.
What should be done if an error is discovered after filing?
The person who filed should contact the Texas Comptroller of Public Accounts immediately. Before new credit certificates can be issued, the paperwork may need to be corrected.
