Idaho FAQ - Recapture of Incentive Investment Tax Credit

Use Form 69R to compute the increase in tax for the recapture of the incentive 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 (ITC) property. Property moved from Idaho ceases to qualify as ITC property and is subject to recapture.

Recapture may be necessary under the following situations:

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
incentive ITC 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 on recapture of prior credits must be added to the tax otherwise determined in the year of recapture.

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