CCH Axcess Tax

ITC and Schedule M-3 Amortization Code

Enter a code to compute Form 3468 Investment Credit or Form 4255 Recapture of Investment Credit. Recapture of Investment Credit is computed in the year of sale for depreciable assets.

Code for Indian Reservation Property (Pre-2018 Assets Only)

Enter a code of "I" to indicate that the property qualifies for the accelerated recovery periods allowed. This is a mandatory entry to use the accelerated recovery periods. Enter the regular MACRS life and method.

Code for Qualified Empowerment Zone Property (Pre-2018 Tax Year)

Enter code "EZ" to invoke the specialized Qualified Empowerment Zone Property regulations concerning the handling of Section 179, including the increased expense amounts and the corresponding cost of qualifying property to be included in the "Total cost of Section 179 property placed in service during the tax year" on the Form 4562.

Codes for Investment Credit (Form 3468)

Regular Investment Credit. Enter an "N" for qualifying transition property to carry the appropriate information to Form 3468. The basis of the asset is reduced by 100 percent of the credit.

Rehabilitation Credit. The basis of the asset is reduced by 100 percent of the credit. Enter one of the following codes to carry the appropriate information to Form 3468:

Code	Description
R	Pre-1936 buildings
HS	Certified historic structures
HE	Certified historic structures not under the transition rule

Note: For codes "HS" and "HE", enter the NPS number on the Investment Credit worksheet.

Energy Credit. The basis of the asset will be reduced by 50 percent of the credit. Enter one of the following codes to carry the appropriate information to Form 3468:

Code	Description
P	Geothermal equipment
H	Solar energy equipment
F	Fuel cell property (after 10/03/2008)
FP	Fuel cell property (before 10/04/2008)
M	Microturbine property
HM	Combined heat and power - Megawatts
HH	Combined heat and power - Horsepower
SW	Small wind energy (after 12/31/2008)
SP	Small wind energy (before 01/01/2009)
W	Wind facility property - Construction began in 2017
W2	Wind facility property - Construction began in 2018
W3	Wind facility property - Construction began in 2019
HP	Geothermal heat pump

Notes:

Enter the kilowatt capacity for codes "F," "FP," or "M," enter the megawatt capacity for code "HM," and the horsepower capacity for code "HH" in Depreciation and Amortization (Form 4562) worksheet > General section > Capacity/tentative credit/location number field.
If the investment property is financed by subsidized energy financing or industrial development bonds, these properties must be entered on the Investment Credit worksheet and no entry made here.

Qualifying Advanced Coal Project Credit

Enter one of the following codes to carry the appropriate information to Form 3468. The basis of the asset will be reduced by 100% of the credit.

Code	Description
CI	Advanced coal - Property described in section 48A(d)(3)(B)(i)
CO	Advanced coal - Property described in section 48A(d)(3)(B)(ii)
CX	Advanced coal - Property described in section 48A(d)(3)(B)(iii)

Qualifying Gasification Project Credit

Enter a "G" or "GP" to carry the appropriate information to Form 3468. The basis of the asset will be reduced by 100% of the credit.

Qualifying Therapeutic Discovery Project Credit

Enter "TD" to carry the appropriate information to Form 3468. The basis of the asset will be reduced by 100% of the credit.

Codes for Recapture of Investment Credit (Form 4255)

When an asset is sold that originally qualified for Investment Credit, enter one of the above codes to carry the appropriate information to Form 4255.

Notes:

Due to the at-risk limitation, the basis for computing depreciation and investment credit may differ. Should the at-risk limitation apply, the investment credit must be entered on the Investment Credit worksheet and no entry made in thisfield.
When computing investment credit recapture, the dollar limitation of $125,000 cannot be determined. If the original investment credit was limited, enter the cost subject to recapture on the Investment Credit Recapture worksheet. Do not make an entry in thisfield.

Codes for Amortization

Code	Description
A1	Goodwill Amortization
A2	Acquisition, Reorganization, and Start-Up Costs Amortization
A3	Other Amortization
A4	Organizational expense per 1.709-2(a) (1065 only)
A5	Syndication expense per 1.709-2{a} (1065 only)

Note: Amortization codes are only valid with Schedule M-3.

Other Qualifying Disaster Area Property

The increased section 179 thresholds will be used when "OD" is entered. Form 4562, line 1 will be increased by up to $100,000. Form 4562, line 3 will be increased by up to $600,000. Entering "OD" does not generate a section 179 deduction. An entry in the Section 179 box is still required.

Code for Enhanced Oil Recovery Credit (Form 8830)

Enter code "O" to compute the Enhanced Oil Recovery Credit for depletion property.

Code for Qualified Electric Vehicle Credit (Form 8834)

Enter code "PE" to compute the Qualified Plug-in Electric Vehicle Credit. The computed credit carries to Form 8834, Part I. To ensure proper presentation of the asset description on Form 8834, line 1, the year, make, and model of the asset must be entered with a semicolon and a space between each word.

This vehicle must be acquired and placed in service after February 17, 2009.

Enter code "EV" if the asset previously claimed the Qualified Electric Vehicle Credit. Enter the amount of the applicable amount in the ITC Adjustment/Salvage field. This option is not valid for current year assets.

Code for Qualified Plug-In Electric Drive Motor Vehicle Credit (Form 8936)

Enter codes "PI," P2," "P3," and "P4" to compute the Qualified Plug-in Electric Drive Motor Vehicle Credit for Form 8936. Code "PI" is used for vehicles weighing 10,000 pounds or less. Code "P2" is used for vehicles weighing between 10,001 and 14,000 pounds. Code "P3" is used for vehicles weighing between 14,001 and 26,000 pounds. Code "P4" is used for vehicles weighing more than 26,000 pounds.

To ensure proper presentation of the asset description on Form 8936, line 1, the year, make, and model of the asset must be entered with a semicolon and a space between each word.

The kilowatt hour capacity of the vehicle's battery must be entered to claim the additional portion of the credit.