What the Texas Form 05-179 (2016) Is For
A rehabilitation credit associated with certified historic structure work completed as a Certified Rehabilitation is calculated and claimed using New York Form CT-222 (2011). Based on qualified rehabilitation expenses related to eligible landmark properties, it assists taxpayers who are requesting state landmark tax credits.
The form complies with preservation standards, which frequently refer to the National Register criteria and the Secretary of the Interior's Standards for Rehabilitation. It helps document the credit amount that may reduce New York tax liability on the applicable Tax Return.
When You’d Use Texas Form 05-179 (2016)
When an eligible taxpayer has spent money on qualifying rehabilitation projects on income-producing properties and wants to claim the historic tax credit for the 2011 tax year, they use Texas Form 05-179 (2016). It is often relevant to businesses that must file corporate paperwork, such as Limited Liability Companies, which are treated as corporations by the state for tax purposes.
Taxpayers can also use the form to calculate the credit when they need to combine it with other investment credit and tax credit items on their return. The filing should indicate the appropriate ownership interest and any reporting that flow-through entities must complete if the project has multiple owners.
Key Rules or Details for 2016
Generally, whether a building is considered a qualified historic structure and whether the work meets certified rehabilitation standards will determine its eligibility for tax benefits. The rehabilitation plan, project expenses, and any required approvals from the State Historic Preservation Office, as well as the National Park Service, if applicable, are typically documented.
Taxpayers should also think about how the impact of credits on tax liability is limited by rules governing passive activity and other credit ordering. The recapture percentage may reduce the benefit and necessitate further reporting in a later year if the credit is altered as a result of recapture regulations.
Step-by-Step (High Level)
Step 1: Confirm the available credit balance
The person who owns the credit should verify the most recent Form 05-901 to ensure the balance and certificate number are accurate. The owner also needs to check that the credit is still valid within the six-year claim period.
Step 2: Identify the transfer type
The parties should determine whether the transaction is a sale, an assignment, or an allocation. The transfer type affects documentation, reporting, and potential passive activity considerations.
Step 3: Gather supporting records
The transferee should get the Certificate of Eligibility, the Certificate of Completed Work, and any other documents that prove the qualified rehabilitation expenses. Examples of supporting documents are photos, audited rehab costs, and, if necessary, a cost segregation study.
Step 4: Complete Form 05-179
The Tax Credit Certificate details, including the amount being sent, as well as the names and addresses of both parties, are required on Form 05-179. To expedite processing, the form should match the Comptroller's records.
Step 5: Obtain signatures and file them on time
Both the transferor and transferee must sign Form 05-179 before submission. The completed form must be filed within 30 days of the transfer date.
Step 6: Receive updated certificates
After reviewing ownership records, the Comptroller updates them and issues new certificates. Each party should retain the revised Form 05-901 Historic Structure Credit Certificate as a permanent record.
Common Mistakes and How to Avoid Them
- Missing the 30-day filing deadline: Submit Form 05-179 within 30 days of the transfer date and set reminders immediately after the transaction.
- Using incorrect credit amounts: Calculate transfers using the most recent Form 05-901 to ensure outdated balances are not used.
- Submitting incomplete documentation: Provide copies of all required documents to the recipient and retain a complete file to support future credit claims.
- Improper allocations by pass-through entities: Allocate credits only to owners and correct any allocations made to non-owners to remain compliant.
- Insurance taxpayers claiming ineligible credits: Claim credits only when acquired through purchase or assignment, and do not claim credits established by the insurance entity itself.
What Happens After You File
The state may check the credit computation and supporting information to ensure the historic tax credit is computed accurately after Form CT-222 (2016) is submitted with the tax return. If the return is chosen for review, the person who filed it may need to show proof of qualified rehabilitation costs and explain why the structure is eligible for Certified Historic Structures status.
If the credit is accepted, it will be deducted from taxes according to the rules for that year. After that, any changes could change the final credit amount, which would mean that the next filing would need to be corrected.
FAQs
Who must file Form 05-179?
Any taxpayer selling, assigning, or allocating a historic structure credit must file Form 05-179. The transferor and transferee must both sign the form.
Can Form 05-179 be filed more than once for the same credit?
Yes, because credits can be transferred multiple times. Each transaction requires a separate Form 05-179 that reports the specific transfer.
Does selling the historic property automatically transfer the credit?
No, because the credit and the historic properties are treated separately. The credit transfers only when Form 05-179 is filed and processed.
What if an error is discovered after Form 05-179 is filed?
Texas does not provide a formal amended version of this form. A corrected filing should be submitted promptly, accompanied by clear identifying information for the original submission.
How does the state credit relate to the federal credit on Form 3468?
The state historic tax credits and the Federal Historic Preservation Tax Incentive are separate programs. Federal credits are generally reported on Form 3468 and may require review by the National Park Service.
Can a tax-exempt entity use the credit?
A tax-exempt organization usually doesn't have to pay state taxes to cover its costs. A business that has to pay taxes may still be able to get the credit, as long as it follows the rules of the program and sends in the right paperwork.
