Use Form 49R to compute the increase in tax and reduction to credit carryover for the recapture of investment tax credit. You must recompute the credit if you earned it in an earlier year, but disposed of the property before the end of the five-year recapture period. You must also recompute the credit on any property ceasing to qualify as investment tax credit property. Property moved from Idaho ceases to qualify as investment tax credit property and is subject to recapture.
Recapture may be necessary when: An S corporation shareholder's interest is reduced by a sale,
● redemption or other disposition of the shareholder's stock, or by the corporation's issuance of more shares. A partner's proportionate interest in the general profits of the
● partnership (or in a particular item of property) is reduced. A trust's, estate's or beneficiary's proportionate interest in the
● income of the trust or estate is reduced.
S corporations, partnerships, estates and trusts that pass through investment tax credit to the shareholders, partners or beneficiaries must provide schedules detailing the recapture information required to compute the recapture on their income tax returns.
Any resulting tax from recapture of credits claimed in prior years must be added to the tax otherwise determined in the year of recapture. Recapture of credits not claimed in prior years reduces the amount of credit carryover available to the current year.