W. Va. Code R. § 110-21C-3

Current through Register Vol. XLI, No. 50, December 13, 2024

Section 110-21C-3 - Methods for Certain Entities to Distribute Credit

3.1. S corporations, partnerships, limited liability companies and other unincorporated groups such as multiple owners of property which would otherwise be eligible for the credit are not directly subject to income tax and thus are not able to claim the credit because they have no income tax against which to apply the credit. However, their shareholders, partners, members, and owners who are subject to income tax may be able to apply the credit to their income tax liability.

3.2. Unless an S corporation, partnership, limited liability company or other unincorporated group not subject to income tax elects the alternative distribution method set forth in subsection 3.3 of this rule, it shall allocate the qualified rehabilitated buildings investment credit allowed under W. Va. Code §§ 11-21-8a or 11-24-23a by using the pro rata method.

3.2.a. Under the pro rata method, the credit shall be allocated to the shareholders, members, partners or owners, as the case may be, either in proportion to their ownership interest in the S corporation, partnership, limited liability company or other unincorporated group, or using the same ratio used to divide profits and losses of the group.

3.3. If the group elects not to use the pro rata method of distribution, it may use an alternative method of its own devising, upon approval in writing by all of the shareholders, members, direct partners or owners and by the Tax Commissioner. The alternative method shall be in writing and shall describe how the credit is to be allocated in sufficient detail that the persons claiming the credit will be able to determine the amount of credit which they are entitled to claim when filing their return. Taxpayers claiming the credit shall file a written copy of the method with the credit Schedule RBIC which is filed with their income tax return.

3.4. No loss of credit shall occur as a result of a change in the type of entity by which a taxpayer conducts its business. Likewise, if a taxpayer subject to the tax imposed by W. Va. Code § 11-24-1 et seq. is a partner or a member of an entity that has applied for and received the credit, its share of the credit may be applied against the tax imposed by W. Va. Code § 11-24-1 et seq. This subsection does not apply to the credit set forth by W. Va. Code § 11-21-8g.

W. Va. Code R. § 110-21C-3