Tax Credit Recapture Calculator
Calculate recapture when disposing of credit property early.
Holding Analysis
Credit Year:2020
Disposition:2025
Held:5 years
Required:5 years
Years to Safe Harbor:0
ITC Recapture Schedule
| Year of Disposition | Recapture % |
|---|---|
| 1 | 100% |
| 2 | 80% |
| 3 | 60% |
| 4 | 40% |
| 5 | 20% |
| 6 | 0% |
Recapture Calculation
Recapture Rate:0%
Recapture Amount:$ 0
Applied to Used:$ 0
Disposition Impact
Gain on Sale:$ 50000
Tax on Recapture:$ 0
Tax on Gain:$ 10000
Total Tax:$ 10000
Recommendation
Holding period satisfied (5 years). No recapture! Credit fully preserved. Proceed with disposition at normal tax treatment.
Investment Credit Rules
- 5-year holding required
- Recapture decreases 20% per year
- Full recapture in year 1
- Applies to ITC (Section 46/48)
- Form 4255 for recapture
Recapture Key Points
- Recapture if disposed early
- Holding period varies by credit
- ITC: 5 years, 20% reduction/year
- Recapture treated as ordinary income
- Applies to credit actually used
- Form 4255 for ITC recapture
- Foreclosure triggers full recapture
- Gift may trigger recapture
- Plan disposition timing
- Track credit usage annually