Form 4255 - Basis Adjustment for Recapture of Investment Credit Tax

Basis Adjustment on Recapture 

For property subject to investment credit recapture, increase the property basis as follows:

• For qualified rehabilitation expenditures, increase the basis by 100% of the recapture tax (or adjustment to carry-backs and carry-overs).
• For energy property or qualified timber property, increase the basis by 50% of the recapture tax (or adjustment to carry-backs and carry-overs).

If you are a partner or S corporation shareholder, the adjusted basis of your interest in the partnership or stock in the S corporation is adjusted to take into account the adjustment made to the basis of property held by the partnership or S corporation.

For more information see IRS Form 4255 General Instructions.