Free 2008 Schedule HR - Wisconsin Historic Rehabilitation Credits (pdf fillable format) - Wisconsin

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HR
Name

Wisconsin Historic Rehabilitation Credits
FilewithWisconsinForm1,1NPR,2,3,4,4I,4T,5,or5S
IdentifyingNumber

WisconsinDepartment ofRevenue

2008
1 2 3 4 5 6 7

Part I
1 2 3 4 5 6 7

Supplement to Federal Historic Rehabilitation Tax Credit

Enteradjustedbasisinthebuildingonthefirstdayoftherehabilitationperiod . . . . . . . . . . . . . . . . . . Enterqualifiedrehabilitationexpenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Enter5%ofamountonline2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Enterhistoricrehabilitationcreditpassedthroughfromotherentities . . . . . . . . . . . . . . . . . . . . . . . . . . Addlines3and4.Thisisyour2008credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Carryoverofunusedsupplementtothefederalhistoricrehabilitationtaxcredit . . . . . . . . . . . . . . . . . . Addlines5and6.Thisistheavailablesupplementtothefederalhistoricrehabilitationtaxcredit . . . .

Part II
8 9 10 11

State Historic Rehabilitation Credit ­ Individuals Only
8 9 10 11

Enterqualifiedpreservationcosts(seeinstructions) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Enter25%ofamountonline8,butnotmorethan$10,000($5,000ifmarriedfilingaseparatereturn) Carryoverofunusedstatehistoricrehabilitationcredit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Addlines9and10.Thisistheavailablestatehistoricrehabilitationcredit . . . . . . . . . . . . . . . . . . . . . .

Instructions for Schedule HR General Instructions
Item to Note Asaresultofclaiminghistoricrehabilitationcredits,individualsmay be subject to Wisconsin's alternative minimum tax. For information aboutcomputingthecreditcarryforward,seeWisconsinTaxBulletin 98(July1996),page29,whichcanbefoundontheDepartment'sweb siteatwww.revenue.wi.gov/ise/wtb/098tr.pdf. Purpose of Schedule HR Use Schedule HR to claim a credit for preserving or rehabilitating historicpropertylocatedinWisconsin.TwoWisconsinhistoricpreservationcreditsareavailable:(1)asupplementtothefederalhistoric rehabilitation tax credit for rehabilitating certified historic structures used for business purposes and (2) a state historic rehabilitation credit, available only to individuals, for preserving or rehabilitating an owner-occupied personal residence that doesn't qualify for the supplementtothefederalcredit. TheWisconsinHistoricalSocietyadministersthehistoricpreservation program.Formoreinformation,visittheHistoricalSociety'swebsite at www.wisconsinhistory.org/hp/architecture/index.asp, write to the Division of Historic Preservation, Wisconsin Historical Society, 816 StateStreet,Madison,WI53706-1417,orcall(608)264-6490. Partnerships, Limited Liability Companies (LLCs) Treated as Partnerships, Tax-Option (S) Corporations, Estates, and Trusts Complete Schedule HR to figure the credit to pass through to the partners, members, shareholders,orbeneficiaries.Partnerships,LLCstreatedaspartnerships,andtax-option(S)corporationscan'tclaimthecredit;instead,the creditflowsthroughtothepartners,members,orshareholdersbased ontheirownershipinterests.Estatesandtrustsmustsharethecredit withthebeneficiariesinproportiontotheincomeallocabletoeach. Ifyouareapartnerofapartnership,memberofanLLCtreatedasa partnership,shareholderofatax-option(S)corporation,orbeneficiary ofanestateortrust,useScheduleHRtoreportyourcredit. Date a Project Is Begun The date a project is "begun" is the date on which the physical work of rehabilitation begins.Thephysicalworkofrehabilitationdoesn'tincludepreliminary activitiessuchasplanning,designing,securingfinancing,exploring, researching, developing plans and specifications, or stabilizing a buildingtopreventdeterioration,suchasplacingboardsoverbroken windows . Adjustment to Basis Ifyouqualifyforthesupplementtothefederalhistoricrehabilitation taxcredit,youmustaddthequalifiedrehabilitationexpenditurestothe basisofthebuildinganddepreciatethembythestraight-linemethod.
IC-034

In addition, you must subtract the amount of credit computed from thebasisofthebuilding. Ifyouqualifyforthestatehistoricrehabilitationcredit,youmustdecrease thebasisofthepropertybytheamountofcreditcomputed. Carryover of Unused Credits The historic rehabilitation credits are nonrefundable. Any unused credits may be carried forward for 15 years. If there is a reorganization of a corporation claiming historic rehabilitation credits, the limitationsprovidedbyIRCsection383mayapplytothecarryover ofanyunusedcredits. Recovery of Credits IncaseswheretheWisconsinHistoricalSocietylaterdeterminesthat theclaimanthasn'tcompliedwithalloftherequirementsforthestate historicrehabilitationcredit,theDepartmentofRevenuemayrecover alloraportionofthecredit.

Specific Instructions
Part I ­ Supplement to the Federal Historic Rehabilitation Tax Credit Toqualifyforthesupplementtothefederalhistoricrehabilitationtax credit,youmustmeetthefollowingrequirements: a. Youmustown(or,incertaincases,lease)abuildingthatislisted intheNationalRegisterofHistoricPlacesorthatisdeterminedto behistoricandwillbelistedintheNationalRegister. b. Youmustusethebuildingfortheproductionofincome,suchas commercial,industrial,orresidentialrentalpurposes.Thebuilding must be depreciable property that is either nonresidential rental property,residentialrentalproperty,orrealpropertywithaclass lifeofmorethan12.5years.Ifonlypartofthebuildingqualifies, onlytherehabilitationexpendituresallocabletothequalifiedportion maybeusedtofigurethecredit. c. Youmustsubstantiallyrehabilitatethebuilding.Abuildingisconsideredtobesubstantiallyrehabilitatedifyourqualifiedrehabilitation expendituresaremorethanthegreaterof$5,000oryouradjusted basisinthebuilding.Theexpendituretestmustbemetwithina 24-month(or,forphasedrehabilitationprojects,a60-month)period thatyouselectandthatendswithorwithinyourtaxableyear.Figure youradjustedbasisonthefirstdayofthe24-monthor60-month rehabilitationperiod.

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"Qualifiedrehabilitationexpenditures"areamountsincurredthat mustbecapitalizedandaddedtothebasisofthebuildingrather thandeducted.Qualifiedexpendituresdon'tincludeanyamount beingdepreciatedunderanacceleratedmethod,thecostofacquiringthebuildingitselforanyinterestinthebuilding,oranyexpense incurredfortheenlargementofanexistingbuilding.

b. Theresidence,includingoutbuildings,can'tbeusedinatradeor business,heldfortheproductionofincome,orheldforsaleorother dispositionintheordinarycourseofyourtradeorbusiness. Ifyouusepartofyourhomeforincome-producingactivities,you maybeabletoclaimthecreditfortheportionthatisyourpersonal residence.SeeWisconsinTaxBulletin86(April1994),page22, whichcanbefoundatwww.revenue.wi.gov/ise/wtb/086tr.pdf,for moreinformation.

d. You must design and carry out the work in accordance with the "SecretaryoftheInterior'sStandardsforRehabilitation." e. YoumustformallyapplytotheNationalParkService,throughthe WisconsinHistoricalSociety,forcertificationofyourproject.The projectmustbeapprovedbeforethephysicalworkofconstruction, ordestructioninpreparationforconstruction,begins. Line 1.Entertheadjustedbasisofthebuildingonthefirstdayofthe 24-monthor60-monthrehabilitationperiod. Line 2.Entertheamountofyourqualifiedrehabilitationexpenditures. Ifyourqualifiedrehabilitationexpendituresduringthe24-monthor60monthrehabilitationperiodaren'tmorethanthegreaterof$5,000or youradjustedbasisinthebuilding,youdon'tqualifyforthecredit. Line 4.Entertheamountofcreditpassedthroughfrompartnerships andLLCstreatedaspartnerships,asshownonSchedule3K-1;taxoption(S)corporations,asshownonSchedule5K-1;andestatesor trusts,asshownonSchedule2K-1. Line 5.Specialinstructionsapplytopass-throughentities. Partnerships, LLCs treated as partnerships, and tax-option (S) corporations:Proratethecreditonline5amongthepartners,members,orshareholdersbasedontheirownershipinterests.Showthe credit for each partner or member on Schedule 3K-1 and for each shareholderonSchedule5K-1. Estates and trusts:Proratethecreditthatotherwisewouldbeentered online5betweentheentityanditsbeneficiariesinproportiontothe incomeallocabletoeach.Showonlytheentity'sportionofthecredit online5.Showthebeneficiaries'portionofthecredittotheleftof line5.Labelit"Beneficiaries'portion"andshowthecreditforeach beneficiaryonSchedule2K-1. Line 6.Enteranyunusedsupplementtothefederalhistoricrehabilitationtaxcreditcarriedoverfromprioryears. Required attachments:YoumustfilewithScheduleHRacopyofthe finalcertificationofcompletedworkfromtheNationalParkService. ForpropertiesnotyetlistedintheNationalRegisterofHistoricPlaces, include a copy of the signed letter from the National Park Service certifyingthatthecompletedrehabilitationmeetsthe"Secretaryofthe Interior'sStandardsforRehabilitation."Ifyouhaven'treceivedthefinal certificationbythetimethetaxreturnisfiled,includeacopyofthe "HistoricPreservationCertificationApplication(Part2-Descriptionof Rehabilitation)."Includeacopyofthefinalcertificationofcompleted worktothefirstincomeorfranchisetaxreturnfiledafterreceiptofthe finalcertificationalongwithanexplanationoftheamountandtheyears inwhichthecreditwasclaimed.Ifthecreditispassedthroughfroma partnership,LLCtreatedasapartnership,tax-option(S)corporation, estate,ortrust,includeacopyofyourSchedule3K-1,5K-1,or2K-1 insteadofthefinalcertification. Part II ­ State Historic Rehabilitation Credit ­ Individuals Only Toqualifyforthestatehistoricrehabilitationcredit,youmustmeetthe followingrequirements: a. Youmustownandoccupyasyourpersonalresidencepropertythat islisted,oreligibletobelisted,intheNationalorStateRegister ofHistoricPlacesorislocatedinahistoricdistrictwhichislistedin theNationalorStateRegisterandiscertifiedbytheStateHistoric PreservationOfficerasbeingofhistoricalsignificancetothedistrict. Includedareoutbuildingsthatcontributetothehistoricsignificance oftheproperty.

c. Yourqualifiedpreservationcostsduringthe2-year(or,forphased preservationprojects,the5-year)periodbeginningwiththedate onwhichthephysicalworkofrehabilitationbeginsmustbemore than$10,000.Ifpropertyisusedforbothbusinessandpersonal purposes,thequalifiedpreservationcostsrelatingtothepersonal residenceportionofthepropertymustbemorethan$10,000.The costsmustbeincurredaftertheWisconsinHistoricalSocietyhas approvedyourproposedpreservationorrehabilitationplan. Inordertoqualify,yourcostsmustrelateonlytopreservationor rehabilitationworkdoneto(1)theexteriorofthehistoricproperty, (2)theinteriorofawindowsashifworkisdonetotheexteriorof thewindowsash,(3)structuralelementsoftheproperty,(4)the heatingorventilatingsystem,or(5)electricalorplumbingsystems, butnotelectricalorplumbingfixtures. In addition, you may claim architectural fees and costs incurred inpreparingnominationformsforlistingintheNationalorState RegisterofHistoricPlaces,ifthenominationismadewithin5years beforesubmissionofyourpreservationorrehabilitationplantothe WisconsinHistoricalSociety. Qualified costs don't include the costs of acquiring the building itself,oranyinterestinthebuilding,oranyexpenseincurredfor theenlargementofanexistingbuilding.





d. You must design and carry out the work in accordance with the "SecretaryoftheInterior'sStandardsforRehabilitation." e. Youmustcompletethepreservationorrehabilitationworkwithin2 years(5yearsforaprojectthatisinitiallyplannedforcompletion inphases). f. TheStateHistoricPreservationOfficermustcertifythatthecompleted projectsubstantiallycomplieswiththepreviouslyapprovedplan. g. Youcan'tclaimacreditforrehabilitatingapersonalresidenceifyou acquiredthepropertyunderanagreementrequiringyoutosellor returnthepropertytothepreviousownerwithin5years. Line 8.Entertheamountofyourqualifiedpreservationcosts.Ifyour qualifiedpreservationcostsduringthe2-yearor5-yearperiodbeginningwiththedateonwhichthephysicalworkofrehabilitationbegins aren'tmorethan$10,000,youdon'tqualifyforthecredit. Youmayelecttoclaimacreditforyourqualifiedpreservationcosts in the year that they are paid rather than in the year in which the projectiscompletedif(a)theprojectwilltakeatleast2yearsand (b)itisreasonabletoexpectthatthecompletedprojectwillqualify forthecredit.Tomakethiselection,showyourtotalprojectcostson thedottedlinetotheleftofentryline8.Online8,showthequalified costspaidthisyear. Line 9.Enter25%oftheamountonline8,butnotmorethan$10,000 ($5,000ifyouaremarriedandfileaseparatereturn).Themaximum creditavailableforanypreservationorrehabilitationprojectis$10,000 ($5,000ifyouaremarriedandfileaseparatereturn). Line 10.Enteranyunusedstatehistoricrehabilitationcreditcarried overfromprioryears. Required attachments:After thework iscompleted,you mustfile withScheduleHRacopyofthefinalcertificationofcompletedwork fromtheWisconsinHistoricalSociety.Forprojectsnotyetcompleted, include a copy of the approved "Historic Preservation Certification Application­Part2."

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