Form 3468: Investment Credit

Form 3468 is generally completed by identifying qualifying property or investments, determining the applicable costs or basis, applying the appropriate credit calculation, and reporting the resulting credit. The information should generally agree with the taxpayer’s property and tax records.

The basic process is to gather the required property and investment information, determine which items may qualify, enter the applicable amounts, calculate the credit, and review the completed form before submitting it with the applicable tax return. Taxpayers should retain supporting records for the property and credit calculation.

Section 1

Enter the taxpayer’s identifying information and applicable reporting information. This generally includes the taxpayer’s name, identifying information, and other information required to associate Form 3468 with the applicable tax return.

The information should be reviewed carefully to make sure it is accurate and consistent with the taxpayer’s tax records.

Section 2

Identify the qualifying property or investment being reported. This generally includes information about the type of property, investment, or other item for which an investment credit is being claimed.

Taxpayers should review the applicable property records before entering information to help ensure that only qualifying items are included.

Section 3

Enter the applicable cost or basis of qualifying property. The amount generally comes from purchase records, construction costs, invoices, and other supporting documentation.

Taxpayers should retain records supporting the amounts reported on Form 3468. Costs should be reviewed carefully to help ensure that the correct amounts are included in the credit calculation.

Section 4

Enter applicable information for energy-related or other qualifying property when required. The information may depend on the type of property and the requirements associated with the applicable credit.

Taxpayers should review their property and supporting records to determine which information applies. Only applicable property and amounts should generally be included.

Section 5

Enter applicable information for rehabilitation or other qualifying property when required. This may include information about eligible improvements, rehabilitation costs, or other qualifying expenditures.

The amounts should generally be supported by property records, invoices, construction records, and other documentation associated with the qualifying property.

Section 6

Complete the applicable investment credit calculations. The calculation generally uses qualifying costs or other applicable amounts to determine the credit associated with the property or investment.

Taxpayers should review the calculations carefully and make sure the amounts used are supported by their records and applicable tax information.

Section 7

Enter any additional applicable credit information required by Form 3468. Only information that applies to the taxpayer’s property or investment should generally be included.

Taxpayers should maintain supporting documentation for any additional information, costs, or calculations reported on the form.

Section 8

Determine the applicable investment credit amount to be reported with the taxpayer’s return. The final calculation should generally reflect the qualifying property, applicable costs, and credit amounts reported on Form 3468.

Taxpayers should compare the final amount with their supporting records before submitting the form. The applicable credit should be reported according to the requirements that apply to the taxpayer’s return.

Section 9

Review the completed Form 3468 and make sure all applicable information has been entered. Check the taxpayer information, qualifying property, dates, costs, applicable credit information, calculations, and final credit amount.

The completed form should generally be included with the applicable tax filing when required. Taxpayers should also keep a copy of Form 3468 and supporting property and investment records for their records.

Final Review

Review Form 3468 after completing all applicable sections. Check the taxpayer information, qualifying property, property dates, investment costs, applicable credit information, calculations, supporting records, and final credit amount.

A final review can help identify calculation or reporting errors before the form is submitted. Taxpayers should retain Form 3468 and supporting property, investment, and tax records with their tax records.