Sec. 1.6418-1 Transfer of eligible credits.
(a) Transfer of eligible credits. An eligible taxpayer may make a transfer election under §1.6418-2(a) to transfer any specified portion of an eligible credit determined with respect to any eligible credit property of such eligible taxpayer for any taxable year to a transferee taxpayer in accordance with section 6418 of the Code and the section 6418 regulations (defined in paragraph (g) of this section). Paragraphs (b) through (q) of this section provide definitions of terms for purposes of applying section 6418 and the section 6418 regulations. See §1.6418-2 for rules and procedures under which all transfer elections must be made, limitations to making transfer elections, the treatment of payments made in connection with transfer elections, and the treatment of eligible credits transferred to transferee taxpayers. See §1.6418-3 for special rules pertaining to transfer elections made by partnerships or S corporations. See §1.6418-4 for pre filing registration requirements and other information required to make any transfer election effective. See §1.6418-5 for special rules related to the imposition of tax on excessive credit transfers, basis reductions, required notifications and impacts of the recapture of transferred credits, and rules regarding carrybacks and carryforwards.
(b) Eligible taxpayer. The term eligible taxpayer means any taxpayer (as defined in section 7701(a)(14) of the Code), other than one described in section 6417(d)(1)(A) and §1.6417-1(b).
(c) Eligible credit—
(1) In general. The term eligible credit is a credit described in paragraph (c)(2) of this section determined for a taxable year with respect to a single eligible credit property of an eligible taxpayer but does not include any business credit carryforward or business credit carryback determined under section 39 of the Code.
(2) Separately determined credit amounts. The amount of any credit described in this paragraph (c)(2) is the entire amount of the credit separately determined with respect to each single eligible credit property of the eligible taxpayer and includes any bonus credit amounts described in paragraph (c)(3) of this section determined with respect to that single eligible credit property. The eligible credits described in this paragraph (c)(2) are:
(i) Alternative fuel vehicle refueling property. So much of the credit for alternative fuel vehicle refueling property allowed under section 30C of the Code that, pursuant to section 30C(d)(1), is treated as a credit listed in section 38(b) of the Code (section 30C credit).
(ii) Renewable electricity production. The renewable electricity production credit determined under section 45(a) of the Code (section 45 credit).
(iii) Carbon oxide sequestration. The credit for carbon oxide sequestration determined under section 45Q(a) of the Code (section 45Q credit).
(iv) Zero-emission nuclear power production. The zero-emission nuclear power production credit determined under section 45U(a) of the Code (section 45U credit).
(v) Clean hydrogen production. The clean hydrogen production credit determined under section 45V(a) of the Code (section 45V credit).
(vi) Advanced manufacturing production. The advanced manufacturing production credit determined under section 45X(a) of the Code (section 45X credit).
(vii) Clean electricity production. The clean electricity production credit determined under section 45Y(a) of the Code (section 45Y credit).
(viii) Clean fuel production. The clean fuel production credit determined under section 45Z(a) of the Code (section 45Z credit).
(ix) Energy. The energy credit determined under section 48 of the Code (section 48 credit).
(x) Qualifying advance energy project. The qualifying advanced energy project credit determined under section 48C of the Code (section 48C credit).
(xi) Clean electricity. The clean electricity investment credit determined under section 48E of the Code (section 48E credit).
(3) Bonus credit amounts. The bonus credit amounts described in this paragraph (c)(3) are:
(i) In the case of a section 30C credit, the increased credit amounts for which the requirements under section 30C(g)(2)(A) and (3) are satisfied.
(ii) In the case of a section 45 credit, the increased credit amounts for which the requirements under section 45(b)(7)(A)(8), (9), and (11) are satisfied.
(iii) In the case of a section 45Q credit, the increased credit amounts for which the requirements under section 45Q(h)(3) and (4) are satisfied.
(iv) In the case of a section 45U credit, the increased credit amount for which the requirements under section 45U(d)(2) are satisfied.
(v) In the case of a section 45V credit, the increased credit amounts for which the requirements under section 45V(e)(3) and (4) are satisfied.
(vi) In the case of a section 45Y credit, the increased credit amounts for which the requirements under section 45Y(g)(7), (9), (10), and (11) are satisfied.
(vii) In the case of a section 45Z credit, the increased credit amounts for which the requirements under section 45Z(f)(6) and (7) are satisfied.
(viii) In the case of a section 48 credit, the increased credit amounts for which the requirements under section 48(a)(10), (11), (12), (14), and (e) are satisfied.
(ix) In the case of a section 48C credit, the increased credit amounts for which the requirements under section 48C(e)(5) and (6) are satisfied.
(x) In the case of a section 48E credit, the increased credit amounts for which the requirements under section 48E(a)(3)(A), (B), (d)(3), (d)(4), and (h) are satisfied.
(d) Eligible credit property. The term eligible credit property means each of the units of property of an eligible taxpayer described in paragraphs (d)(1) through (11) of this section with respect to which the amount of an eligible credit is determined:
(1) In the case of a section 30C credit, a qualified alternative fuel vehicle refueling property described in section 30C(c).
(2) In the case of a section 45 credit, a qualified facility described in section 45(d).
(3) In the case of a section 45Q credit, a component of carbon capture equipment within a single process train described in §1.45Q-2(c)(3).
(4) In the case of a section 45U credit, a qualified nuclear power facility described in section 45U(b)(1).
(5) In the case of a section 45V credit, a qualified clean hydrogen production facility described in section 45V(c)(3).
(6) In the case of a section 45X credit, a facility that produces eligible components, as described in guidance under sections 48C and 45X.
(7) In the case of a section 45Y credit, a qualified facility described in section 45Y(b)(1).
(8) In the case of a section 45Z credit, a qualified facility described in section 45Z(d)(4).
(9) Section 48 property--
(i) In general. In the case of a section 48 credit and except as provided in paragraph (d)(9)(ii) of this section, an energy property described in section 48.
(ii) Pre-filing registration and elections. At the option of an eligible taxpayer, and to the extent consistently applied for purposes of the pre-filing registration requirements of §1.6418-4 and the election requirements of §§1.6418-2 through 1.6418-3, an energy project as described in section 48(a)(9)(A)(ii) and defined in guidance.
(10) In the case of a section 48C credit, an eligible property described in section 48C(c)(2).
(11) In the case of a section 48E credit, a qualified facility as defined in section 48E(b)(3) or, in the case of a section 48E credit relating to a qualified investment with respect to energy storage technology, an energy storage technology described in section 48E(c)(2).
(e) Guidance. The term guidance means guidance published in the Federal Register or Internal Revenue Bulletin, as well as administrative guidance such as forms, instructions, publications, or other guidance on the IRS.gov website. See §§601.601 and 601.602 of this chapter.
(f) Paid in cash. The term paid in cash means a payment in United States dollars that--
(1) Is made by cash, check, cashier’s check, money order, wire transfer, automated clearing house (ACH) transfer, or other bank transfer of immediately available funds;
(2) Is made within the period beginning on the first day of the eligible taxpayer’s taxable year during which a specified credit portion is determined and ending on the due date for completing a transfer election statement (as provided in §1.6418-2(b)(5)(iii)); and
(3) May include a transferee taxpayer’s contractual commitment to purchase eligible credits with United States dollars in advance of the date a specified credit portion is transferred to such transferee taxpayer if all payments of United States dollars are made in a manner described in paragraph (f)(1) of this section during the time period described in paragraph (f)(2) of this section.
(g) Section 6418 regulations. The term section 6418 regulations means §§1.6418-1 through 1.6418-5.
(h) Specified credit portion. The term specified credit portion means a proportionate share (including all) of an eligible credit determined with respect to a single eligible credit property of the eligible taxpayer that is specified in a transfer election. A specified credit portion of an eligible credit must reflect a proportionate share of each bonus credit amount that is taken into account in calculating the entire amount of eligible credit determined with respect to a single eligible credit property.
(i) Statutory references—
(1) Chapter 1. The term chapter 1 means chapter 1 of the Code.
(2) Code. The term Code means the Internal Revenue Code.
(3) Subchapter K. The term subchapter K means subchapter K of chapter 1.
(j) Transfer election. The term transfer election means an election under section 6418(a) of the Code to transfer to a transferee taxpayer a specified portion of an eligible credit determined with respect to an eligible credit property in accordance with the section 6418 regulations.
(k) Transferee partnership. The term transferee partnership means a partnership for Federal tax purposes that is a transferee taxpayer.
(l) Transferee S corporation. The term transferee S corporation means an S corporation within the meaning of section 1361(a) that is a transferee taxpayer.
(m) Transferee taxpayer. The term transferee taxpayer means any taxpayer that is not related (within the meaning of section 267(b) or 707(b)(1) of the Code) to the eligible taxpayer making the transfer election to which an eligible taxpayer transfers a specified credit portion of an eligible credit.
(n) Transferor partnership. The term transferor partnership means a partnership for Federal tax purposes that is an eligible taxpayer that makes a transfer election.
(o) Transferor S corporation. The term transferor S corporation means an S corporation within the meaning of section 1361(a) that is an eligible taxpayer that makes a transfer election.
(p) Transferred specified credit portion. The term transferred specified credit portion means the specified credit portion that is transferred from an eligible taxpayer to a transferee taxpayer pursuant to a transfer election.
(q) U.S. territory. The term U.S. territory means the Commonwealth of Puerto Rico, Guam, the U.S. Virgin Islands, American Samoa, and the Commonwealth of the Northern Mariana Islands.
(r) Applicability date. This section applies to taxable years ending on or after April 30, 2024. For taxable years ending before April 30, 2024, taxpayers, however, may choose to apply the rules of this section and §§1.6418-2, -3, and -5, provided the taxpayers apply the rules in their entirety and in a consistent manner.
[Added by T.D. 9993, 89 FR 34770-34816, Apr. 30, 2024.]
