What Texas Form 05-179 Is For
The sale, assignment, or allocation of a historic structure credit must be reported to the Texas Comptroller of Public Accounts using Texas Form 05-179. The filing enables the state to monitor the rehabilitation credit of a certified landmark structure.
Texas businesses use this form when transferring a Tax Credit tied to the Certified Rehabilitation of historic properties. The credit may be applied against Texas Franchise Tax or eligible insurance premium tax reports once properly recorded.
When You’d Use Texas Form 05-179
When a historic structure credit is sold, assigned, or allocated, a Reporting Entity is required to file Texas Form 05-179. Whether the entire credit amount or just a portion of it is transferred, this requirement remains in effect.
After the transaction date, the form must be submitted within 30 days. Until the Texas Comptroller issues a new Tax Credit Certificate, the recipient cannot apply the credit to insurance premium tax returns or franchise tax reports.
Delays might prevent the credit from being claimed for the year it was intended to be claimed, but they don't always result in a penalty. If the information about ownership interests or credit amounts is wrong, you may need to file amended returns.
Key Rules or Details for 2018
For tax years beginning in 2018, the historic structure credit applies to a qualified historic structure that completes Certified Rehabilitation and receives a valid Certificate of Eligibility from the Texas Comptroller. The Tax Credit equals 25 percent of qualified rehabilitation expenditures and may be applied against Texas Franchise Tax or specific insurance premium tax reports.
After the certified historic property is put into use, the credit expires six tax years later. Using Texas Form 05-179 to sell, assign, or allocate the credit does not shorten its expiration date or lower the initial tax liability limitations.
Step-by-Step (High Level)
Step 1: Gather required documents
Get the Certificate of Eligibility for the property, the most recent Historic Structure Credit Certificate (Form 05-901), and the audited cost report that backs up the costs of rehabilitation that are eligible.
Step 2: Complete ownership information
In Section A, type in the name of the current credit owner using the same information that is on file with the Texas Comptroller, like ownership filings or the Franchise Tax Report. In Section B, check that the recipient's full name and ID number match the ones in the Comptroller's files.
Step 3: Report the transaction details
In Section C, write down the date of the transaction, the amount of credit that was transferred, and any balance that the seller still owes. The form must be signed and dated by both parties; incomplete forms will not be accepted.
Step 4: Submit the filing package
Together with any other necessary paperwork, the completed form should be sent to the Texas Comptroller of Public Accounts in Austin, Texas. Keep copies of all submitted documents for your records.
Step 5: Track processing and updated certificates
Keep track of the submission's progress and keep proof of mailing. After examining the paperwork, the Comptroller issues new credit certificates that reflect the updated balances and updates the ownership records.
Common Mistakes and How to Avoid Them
- Missing the 30-day filing deadline: File within 30 days of the transaction date so the transfer can be processed before upcoming tax report deadlines.
- Entering incorrect federal identification numbers or entity names: Match entity names and identification numbers to Texas Comptroller records before submission.
- Omitting Form 05-901 or the Certificate of Eligibility: Attach the required certificate documents to complete the transfer request.
- Reporting credit amounts that do not reconcile with the original certificate: Verify that the quantity transferred plus any retained balance equals the credit shown on the original certificate.
- Attempting to allocate credits to unrelated taxable entities: Transfer or allocate credits only as allowed under program rules, and avoid allocations to non-owners or unrelated entities.
What Happens After You File
The Texas Comptroller verifies the accuracy, eligibility, and completeness of the filing upon receipt. This review verifies the taxable entity status and validates qualified rehabilitation costs.
Each party involved receives an updated Historic Structure Credit Certificate after it has been approved. The recipient can then apply the credit to relevant tax returns for qualifying tax years.
If errors are identified, the Comptroller contacts the Reporting Entity to request corrections. Prompt responses help prevent delays that could affect tax return preparation.
FAQs
Can a historic structure credit be sold more than once?
Yes, as long as each transfer is accurately reported, Texas law does not restrict how many times a historic structure credit may be sold or assigned before it expires.
Can only part of the credit be transferred?
Yes, a reporting entity may sell, assign, or allocate any portion of the available credit while retaining the remaining balance.
Who is responsible for filing Texas Form 05-179?
The entity transferring the credit is responsible for filing the form. Both the seller and the recipient must sign to confirm the transaction.
Does the historic structure credit apply to income tax?
No, the credit applies only to Texas Franchise Tax and eligible insurance premium tax reports. It does not apply to federal income tax or individual income tax.
What happens if the form is filed after the deadline has passed?
Late filing may delay issuance of the updated Tax Credit Certificate. The recipient cannot claim the credit until the certificate is issued.
Are individuals eligible to receive the credit?
Individuals may receive the credit only through flow-through entities such as partnerships or Limited Liability Companies that allocate credits to their members.
Does selling the credit change its expiration date?
No, the expiration date remains tied to the taxable year the qualified historic structure was placed in service, regardless of ownership changes.
