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1998 Department of the Treasury

Internal Revenue Service

Instructions for Form 3800


General Business Credit
Section references are to the Internal Revenue Code.

The empowerment zone employment 2. Figure your spouse's tax in that


General Instructions credit, while a part of the general business year as though he or she was married
credit, is figured separately on Form 8844 filing a separate return.
A Change To Note and never carried to Form 3800. 3. Add the amounts in steps 1 and 2.
For credits arising in tax years beginning 4. Divide the amount in step 1 by the
after December 31, 1997, the carryback Carryback and Carryforward amount in step 3. The result should be
and carryforward rules have changed. of Unused Credit rounded to at least three decimal places.
Unused credits are now carried back 1 5. Multiply the decimal in step 4 by the
If you cannot use part or all of the credit total tax shown on your joint return for the
year and then forward 20 years. However, because of the tax liability limit, carry the
the old rules continue to apply to credits carryback or carryforward year. The
excess credit back 1 tax year. result is your separate tax liability and a
that arose in prior tax years.
If you have an unused credit after carryback or carryforward credit is applied
carrying it back, carry it forward to each against this amount only.
Who Must File of the 20 tax years after the year of the Although your carryback or
You must file Form 3800 if any of the credit. Any “qualified business credits” (as carryforward of the credit is limited to your
following apply: defined in section 196(c)) that are unused separate tax liability, the amount of your
1. You have more than one of the after that 20-year carryforward period has refund resulting from the carryback or
credits listed below (other than the expired (or at the time a taxpayer dies or carryforward is further limited to your
empowerment zone employment credit). goes out of business) may be taken as a share of the joint overpayment. This is
2. You have general credits from an deduction in the first tax year following the found by subtracting your separate tax
electing large partnership shown in box 7 expiration of the 20-year carryforward liability (as determined above) from your
of Schedule K-1 (Form 1065-B). period (or in the tax year in which the contribution toward the payment.
taxpayer's death or cessation of business
3. You have a carryback or occurs). For purposes of this special Unless you have an agreement or clear
carryforward of any of these credits (other deduction, only half of the following evidence of each spouse's contribution
than the empowerment zone employment credits may be taken into account: (a) toward the payment of the joint liability,
credit). unused investment credit (other than a your contribution includes the tax withheld
4. Any of these credits (other than the credit to which section 48(q)(3) applies as on your wages and your share of the joint
low-income housing credit or the in effect prior to repeal by the Revenue estimated tax or tax paid with the return.
empowerment zone employment credit) is Reconciliation Act of 1990), and (b) Your share of these payments is found
from a passive activity. unused credit for increasing research by using the same formula used in
5. You are claiming the trans-Alaska activities. determining your separate tax liability.
pipeline liability fund credit. Substitute the joint estimated tax, or tax
Do not include any carryback or paid with the return, for the tax in step 5.
If you are not required to file Form carryforward of the empowerment zone
3800, file only the applicable credit If the original return for the carryback year
employment credit on Form 3800. resulted in an overpayment, reduce your
form(s) listed in the parentheses below. Instead, use Form 8844. contribution by your share of the refund.
The general business credit consists of Change in marital status. Your general
the following credits: Attach a copy of the computation to
business credit is limited to your tax your claim for refund showing how you
● Investment (Form 3468), liability. Therefore, if you filed a joint made the allocations.
● Work opportunity (Form 5884), return in a carryback or carryforward year
and your marital status has changed, you Credit ordering rule. The general
● Welfare-to-work (Form 8861),
may need to figure your separate tax business credits are used in the following
● Alcohol used as fuel (Form 6478), order as of the close of the tax year in
liability in that carryback or carryforward
● Increasing research activities (Form
year. This would apply if: which the credit is used:
6765), ● You filed as single in the credit year,
● Regular investment credit.
● Low-income housing (Form 8586), ● Rehabilitation investment credit.
but filed a joint return in the carryback or
● Enhanced oil recovery (Form 8830), carryforward year. ● Employee plan investment credit
● Disabled access (Form 8826), ● You filed a joint return in the credit year, carryforward.
● Renewable electricity production (Form but filed a joint return with a different ● Energy investment credit.
8835), spouse in the carryback or carryforward ● Reforestation investment credit.
● Indian employment (Form 8845), year. ● Work opportunity credit (including any
● Employer social security and Medicare ● You were married and filed a separate jobs credit carryforward).
taxes paid on certain employee tips (Form return in the credit year, but filed a joint ● Welfare-to-work credit.
8846), return with the same or a different spouse ● Credit for alcohol used as fuel.
● Orphan drug (Form 8820), in the carryback or carryforward year. ● Credit for increasing research activities.
● Contributions to selected community Determine your separate tax liability in ● Low-income housing credit.
development corporations (Form 8847), the carryback or carryforward year as
● Enhanced oil recovery credit.
and follows:
● Disabled access credit.
● Trans-Alaska pipeline liability fund. 1. Figure your tax for the carryback
or carryforward year as though you were ● Renewable electricity production credit.
married filing a separate return. ● Indian employment credit.

Cat. No. 10622Q


● Employer social security and Medicare investment credit and 46(b)(2)(C) and (D) Line 18. If line 17 is smaller than line 8,
taxes paid on certain employee tips. business energy investment credit (as in see Carryback and Carryforward of
● Orphan drug credit. effect prior to the repeal of these three Unused Credit on page 1.
● Credit for contributions to selected sections by the Revenue Reconciliation Individuals, estates, or trusts. The
community development corporations. Act of 1990). Use the following worksheet credit for increasing research activities on
● WIN credit carryforward.
to figure the allowable portion and include line 18 is limited to the amount of tax
the reduced credit on line 6. Do not attributable to your taxable income from
● Employee stock ownership plan
reduce any portion of the credit the sole proprietorship, partnership, S
(ESOP) credit carryforward. attributable to qualified timber property. corporation, estate, or trust (flow-through
● Trans-Alaska pipeline liability fund
entity) generating the credit. Figure the
credit. 1. Carryforward of applicable section research credit limitation separately for
● General credits from an electing large 46(a)(1) regular and sections each business enterprise by using the
partnership. 46(b)(2)(C) and (D) energy
investment credit (prior to repeal by following formula: Taxable income attributable
Although these credits are aggregated the Revenue Reconciliation Act of to your interest in the sole
as the general business credit, keep a 1990) from prior year(s) ..................... proprietorship, or
separate record of each credit to ensure 2. Enter 35% (.35) of line 1 above ......... flow-through entity
3. Subtract line 2 from line 1. This is the (Line 13 – line 15) 3
that no credits or deductions are lost. amount of the applicable regular and Your taxable income for the
energy investment credit carryforward year
you may use. Enter here and include
with any other carryforwards on line
Specific Instructions 6 of Form 3800................................... When using the formula, you are limited
to 100% of line 13 minus line 15. If in the
If you cannot use all of the reduced current tax year you had no taxable
Parts I and II credit because line 17 is smaller than line income attributable to a particular
8, carry forward to your next tax year in business interest, you cannot claim any
Lines 1a–1m. Complete the applicable the carryforward period the unused
part (generally Part I) of the appropriate research credit this year related to that
portion of the credit and a corresponding business.
credit form(s) to figure your current year portion of the 35% reduction. For
credit(s). Enter this amount on the If your credit for increasing research
example, if you are able to use only half activities is limited by the above formula,
applicable line 1 entry space(s) and attach of the line 3 credit of the worksheet above
the credit form(s) to your return. enter on line 18 the total of the amount
in 1998, carry forward the other half of the calculated above for the credit for
Line 1n. Attach a statement that shows credit and half of the 35% reduction.
how you figured the credit under section increasing research activities plus the
Line 7. Use only when you amend your general business credit from other
4612(e). 1998 return to carry back unused credits
Line 1o. Enter the total of the amounts sources. Write “Sec. 41(g)” in the margin
from 1999. next to your entry on line 18.
shown in box 7 of the Schedules K-1 Do not enter the carryback of any
(Form 1065-B) you received from electing Corporations. If the corporation has
unused empowerment zone employment undergone a post-1986 “ownership
large partnerships. credit on line 7. Instead, enter this
Line 3. Enter the credits included on line change” (as defined in section 382(g)),
carryback on Form 8844. sections 383 and 384 may limit the
2 that are from passive activities. Line 12. Enter the alternative minimum
Generally, a passive activity is a trade or amount of tax, including the tax on built-in
tax (AMT) that was figured on the gains, that may be offset by pre-change
business in which you did not materially appropriate form or schedule:
participate. Generally, rental activities are general business credits. If either of these
passive activities, whether or not you
● Individuals: Enter the amount from limitations apply, attach a computation of
materially participate. See Form Form 6251, line 28. the allowable general business credit;
8582-CR, Passive Activity Credit ● Corporations: Enter the amount from enter the amount on line 18; and write
Limitations (for individuals, trusts, and Form 4626, line 15. “Sec. 383” or “Sec. 384” in the margin
estates), or Form 8810, Corporate ● Estates and trusts: Enter the amount next to your entry on line 18.
Passive Activity Loss and Credit from Form 1041, Schedule I, line 39.
Limitations, for more details. Line 14. Although you may not owe AMT, Schedule A
Line 5. Enter the passive activity credit you generally must still compute the C corporations. A corporation other than
allowed for 1998 from Form 8582-CR or tentative minimum tax (TMT) to figure an S corporation may be entitled to a
Form 8810. See the instructions for the your credit. For a small corporation larger general business credit or
applicable form for more information. exempt from the AMT under section additional credit against the AMT if it is
Line 6. All carryforwards of unused 55(e), enter zero. Otherwise, enter the claiming a regular investment credit
credits that make up the general business TMT that was figured on the appropriate carryforward on line 6, some of that
credit are added together and become a AMT form or schedule: investment credit cannot be used
business credit carryforward to 1998. ● Individuals: Enter the amount from because line 17 is smaller than line 8, and
For each credit, attach a detailed Form 6251, line 26. it is required to file Form 4626, Alternative
computation showing (a) the tax year the ● Corporations: Enter the amount from Minimum Tax—Corporations. Complete
credit originated, the amount of the credit, Form 4626, line 13. Schedule A to determine if the corporation
and the amount allowed for that year; (b) ● Estates and trusts: Enter the amount is entitled to this additional credit.
for each carryback year, the year and the from Form 1041, Schedule I, line 37. Line 37. Reduce the AMT that the
amount of the credit allowed after you Line 15. See section 38(c)(3) for special corporation figured on line 15 of Form
applied the carryback; and (c) for each rules that apply to married couples filing 4626 by the line 37 amount. Enter the
carryforward year, the year and the separate returns, controlled corporate reduced AMT on Form 1120, Schedule J,
amount of the credit allowed after you groups, regulated investment companies, line 9 (or Form 1120-A, Part I, line 6). See
applied the carryforward. real estate investment trusts, and estates the instructions for the appropriate line of
You must reduce by 35% the portion and trusts. the corporate income tax return for details
of the business credit carryforward on reporting the reduced AMT.
attributable to sections 46(a)(1) regular

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