ITC Recapture Amount
How do I determine the ITC recapture amount?
When you dispose of an asset before the end of its estimated life, you must recapture a prorated amount of the ITC. If you reduced the asset's basis for the original ITC, a percentage of that recaptured amount must be added back to the asset's basis.
The following table shows the percentages the system applies to the full ITC amount to determine the ITC recapture amount. The system uses the depreciation method and estimated life entered in the Tax book.
| ITC Recapture Percentages | |||
|
|
Pre-1991 Recovery Property |
Post-1990 Recovery Property |
|
|
Holding Period |
Less than or Equal to 3 Year Est. Life (%) |
Greater than 3 Year Est. Life (%) |
All Lives |
|
0 |
100 |
100 |
100 |
|
1 |
66 |
80 |
80 |
|
2 |
33 |
60 |
60 |
|
3 |
0 |
40 |
40 |
|
4 |
0 |
20 |
20 |
|
5 |
0 |
0 |
0 |
|
6 |
0 |
0 |
0 |
After determining the ITC recapture amount, the system multiplies the recapture amount by the rate used for computing the ITC. The result is the ITC basis addback amount.