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(h) Carryover or refund of unused investment credit or retail enterprise credit.
(1) General. Except as provided for in paragraph (2) of this subdivision, any part of the investment credit or the retail enterprise credit which is not used, because such investment credit or retail enterprise credit exceeds the ordinary tax against which such investment credit or retail enterprise credit may be applied, may be carried over to the following year or years and may be subtracted from the taxpayer's ordinary tax for such year or years.
(2)
(i) A taxpayer who qualifies as an owner of a new business (see subparagraph [ii] of this paragraph) may, in lieu of carrying over the unused investment credit or the retail enterprise credit as provided for in paragraph (1) of this subdivision, receive the investment credit or the retail enterprise credit not used as a refund. Any refund of unused investment credit or retail enterprise credit pursuant to this paragraph shall be deemed to be a refund of an overpayment of New York State personal income tax as provided in section 686 of the Tax Law; however, no interest may be paid on such refund of unused investment credit or retail enterprise credit.
(ii) For purposes of this paragraph, an individual who is either a sole proprietor or a member of a partnership will qualify as an owner of a new business unless:
(a) such individual has previously received a refund of an investment credit or a retail enterprise credit pursuant to this paragraph;
(b) the business of which such individual is an owner is substantially similar in operation and in ownership to a business entity taxable, or previously taxable, under section 183 of the Tax Law (New York State Franchise Tax on transportation and transmission corporations and associations), section 184 of the Tax Law (New York State Additional Franchise Tax on transportation and transmission corporations and associations), section 185 of the Tax Law (New York State Franchise Tax on farmers', fruit growers', and other like agricultural corporations organized and operated on a cooperative basis), section 186 of the Tax Law (New York State Franchise Tax on water-works companies, gas companies, electric or steam heating, lighting and power companies), article 9-A of the Tax Law (New York State Franchise Tax on business corporations), article 32 of the Tax Law (New York State Franchise Tax on banking corporations), article 33 of the Tax Law (New York State Franchise Tax on insurance corporations), article 23 of the Tax Law (New York State Unincorporated Business Income Tax) or which would have been subject to tax under such article 23 as such article was in effect on January 1, 1980, or the income (or loss) of which (or was) includible under article 22 of the Tax Law (New York State Personal Income Tax) whereby the intent and purpose of this paragraph with respect to the refunding of the investment credit or the retail enterprise credit to a new business would be evaded; or
(c) such individual has operated such new business entity for more than four years prior to the first day of the taxable year during which such individual first becomes eligible for the investment credit or the retail enterprise credit for which the refund of the unused investment credit or retail enterprise credit is claimed with respect to such new business entity.
(i) Recomputation of investment credit or retail enterprise credit on property that is disposed of or on property that ceases to qualify. (1) Investment credit.
(i)
(a) With respect to qualified property which is depreciable pursuant to section 167 of the Internal Revenue Code and which is disposed of or ceases to be in qualified use prior to the end of its useful life, the difference between the investment credit taken and the investment credit allowed for actual use must be added back to the ordinary tax otherwise due in the year of disposition or disqualification.
(b) The amount of investment credit to be added back pursuant to clause ( a ) of this subparagraph is computed as follows:
(1) divide the total number of months of qualified use of the property by the total number of months of useful life;
(2) multiply the amount computed in subclause ( 1 ) of this clause by the amount of the investment credit claimed on the property to ascertain the investment credit allowed for actual use;
(3) subtract the investment credit allowed for actual use from the investment credit claimed on the property to determine the amount of investment credit to be added back; and
(4) add the amount of investment credit to be added back to the ordinary tax due for the year the property was disposed of or ceased to qualify.
(c) An add-back, pursuant to clause ( a ) of this subparagraph of the investment credit taken will not be required if the property is disposed of or ceases to be in qualified use after such property has been in qualified use for more than 12 consecutive years or after the end of such property's useful life.
(d) As used in this subparagraph, the useful life of property is the same number of years as the taxpayer uses for Federal depreciation purposes pursuant to section 167 of the Internal Revenue Code.
(ii)
(a) Except with respect to that qualified property referred to in subparagraph (iv) of this paragraph (a building or a structural component of a building), with respect to qualified property which is three-year property (as defined in section 168[c][2] of the Internal Revenue Code) and which is disposed of or ceases to be in qualified use prior to the end of 36 months, the difference between the investment credit taken and the investment credit allowed for actual use must be added back to the ordinary tax otherwise due in the year of disposition or disqualification.
(b) The amount of investment credit to be added back pursuant to clause ( a ) of this subparagraph is computed as follows:
(1) divide the total number of months of qualified use of the property by 36;
(2) multiply the amount computed in subclause ( 1 ) of this clause by the amount of the investment credit claimed on the property to ascertain the investment credit allowed for actual use;
(3) subtract the investment credit allowed for actual use from the investment credit claimed on the property to determine the amount of investment credit to be added back; and
(4) add the amount of investment credit to be added back to the ordinary tax due for the year the property was disposed of or ceased to qualify.
(c) An add-back, pursuant to clause ( a ) of this subparagraph, of the investment credit taken will not be required if the property is disposed of or ceases to be in qualified use after such property has been in qualified use for more than 36 months.
(iii)
(a) Except with respect to that qualified property referred to in subparagraph (iv) of this paragraph (a building or a structural component of a building), with respect to qualified property which is 5-year property, 10-year property and 15-year real property (as defined in section 168[c][2] of the Internal Revenue Code), and which is disposed of or ceases to be in qualified use prior to the end of 60 months, the difference between the investment credit taken and the investment credit allowed for actual use must be added back to the ordinary tax otherwise due in the year of disposition or disqualification.
(b) The amount of investment credit to be added back pursuant to clause ( a ) of this subparagraph is computed as follows:
(1) divide the total number of months of qualified use of the property by 60;
(2) multiply the amount computed in subclause ( 1 ) of this clause by the amount of the investment credit claimed on the property to ascertain the investment credit allowed for actual use;
(3) subtract the investment credit allowed for actual use from the investment credit claimed on the property to determine the amount of investment credit to be added back; and
(4) add the amount of investment credit to be added back to the ordinary tax due for the year the property was disposed of or ceased to qualify.
(c) An add-back, pursuant to clause ( a ) of this subparagraph, of the investment credit taken will not be required if the property is disposed of or ceases to be in qualified use after such property has been in qualified use for more than 60 months.
(iv)
(a) With respect to any recovery property to which section 168 of the Internal Revenue Code applies, which is a building or a structural component of a building and which is disposed of or ceases to be in qualified use prior to the end of the period over which the taxpayer chooses to deduct the property under section 168 of the Internal Revenue Code, the difference between the investment credit taken and the investment credit allowed for actual use must be added back to the ordinary tax otherwise due in the year of disposition or disqualification.
(b) The amount of investment credit to be added back pursuant to clause ( a ) of this subparagraph is computed as follows:
(1) divide the total number of months of qualified use of the property by the total number of months over which the taxpayer chose to deduct the property under section 168 of the Internal Revenue Code;
(2) multiply the amount computed in subclause ( 1 ) of this clause by the amount of the investment credit claimed on the property to ascertain the investment credit allowed for actual use;
(3) subtract the investment credit allowed for actual use from the investment credit claimed on the property to determine the amount of investment credit to be added back; and
(4) add the amount of investment credit to be added back to the ordinary tax due for the year the property was disposed of or ceased to qualify.
(c) An add-back, pursuant to clause ( a ) of this subparagraph, of the investment credit taken will not be required if the property is disposed of or ceases to be in qualified use for more than 12 consecutive years or after the end of the total number of months over which the taxpayer chose to deduct the property under section 168 of the Internal Revenue Code.
(v) For purposes of this paragraph, a disposition of qualified property includes, but is not limited to:
(a) a sale of the property;
(b) the sale by a partner of his interest in a partnership;
(c) an exchange of qualified property for other property of like kind (including a trade-in of qualified property);
(d) condemnation of the property;
(e) a gift of the property;
(f) the contribution of property to a partnership or corporation, unless a substantial interest in the ownership of the trade or business is retained by the transferor;
(g) loss of the property due to fire, theft, storm or other casualty;
(h) a legal dissolution of the taxpayer; and
(i) transfer upon foreclosure of a security interest in the property.
(vi) For purposes of this paragraph, property which ceases to be in qualified use includes, but is not limited to:
(a) property which no longer has a situs in New York State;
(b) property which is no longer used in the production of goods or as an air pollution control facility, a water pollution control facility or a research or development facility;
(c) qualified property which has been converted to personal use;
(d) qualified property which was retired prior to:
(1) the expiration of its useful life in the case of property depreciable pursuant to section 167 of the Internal Revenue Code;
(2) 36 months in the case of three-year property (as defined in section 168[c][2] of the Internal Revenue Code) for which a recovery deduction is allowable under section 168 of the Internal Revenue Code;
(3) 60 months in the case of 5-year property, 10-year property and 15-year real property (as defined in section 168[c][2] of the Internal Revenue Code) for which a recovery deduction is allowable under section 168 of the Internal Revenue Code; or
(4) the end of the total number of months over which the taxpayer chose to deduct the property under section 168 of the Internal Revenue Code in the case of any recovery property to which section 168 of the Internal Revenue Code applies which is a building or a structural component of a building; and
(e) property on which an investment credit was allowed and subsequently leased to others.
(vii) See subparagraph (b)(1)(iii) of this section for determining the amount of investment credit on property that is disposed of or that ceases to qualify for such credit prior to the end of the taxable year in which the investment credit is to be taken.
(i) A taxpayer who qualifies as an owner of a new business (see subparagraph [ii] of this paragraph) may, in lieu of carrying over the unused investment credit or the retail enterprise credit as provided for in paragraph (1) of this subdivision, receive the investment credit or the retail enterprise credit not used as a refund. Any refund of unused investment credit or retail enterprise credit pursuant to this paragraph shall be deemed to be a refund of an overpayment of New York State personal income tax as provided in section 686 of the Tax Law; however, no interest may be paid on such refund of unused investment credit or retail enterprise credit.
(a) With respect to qualified property which is depreciable pursuant to section 167 of the Internal Revenue Code and which is disposed of or ceases to be in qualified use prior to the end of its useful life, the difference between the investment credit taken and the investment credit allowed for actual use must be added back to the ordinary tax otherwise due in the year of disposition or disqualification.
(b) The amount of investment credit to be added back pursuant to clause ( a ) of this subparagraph is computed as follows:
(1) divide the total number of months of qualified use of the property by the total number of months of useful life;
(2) multiply the amount computed in subclause ( 1 ) of this clause by the amount of the investment credit claimed on the property to ascertain the investment credit allowed for actual use;
(3) subtract the investment credit allowed for actual use from the investment credit claimed on the property to determine the amount of investment credit to be added back; and
(4) add the amount of investment credit to be added back to the ordinary tax due for the year the property was disposed of or ceased to qualify.
(1) divide the total number of months of qualified use of the property by the total number of months of useful life;
(2) multiply the amount computed in subclause ( 1 ) of this clause by the amount of the investment credit claimed on the property to ascertain the investment credit allowed for actual use;
(3) subtract the investment credit allowed for actual use from the investment credit claimed on the property to determine the amount of investment credit to be added back; and
(4) add the amount of investment credit to be added back to the ordinary tax due for the year the property was disposed of or ceased to qualify.
(c) An add-back, pursuant to clause ( a ) of this subparagraph of the investment credit taken will not be required if the property is disposed of or ceases to be in qualified use after such property has been in qualified use for more than 12 consecutive years or after the end of such property's useful life.
(d) As used in this subparagraph, the useful life of property is the same number of years as the taxpayer uses for Federal depreciation purposes pursuant to section 167 of the Internal Revenue Code.
(ii) For purposes of this paragraph, an individual who is either a sole proprietor or a member of a partnership will qualify as an owner of a new business unless:
(a) such individual has previously received a refund of an investment credit or a retail enterprise credit pursuant to this paragraph;
(b) the business of which such individual is an owner is substantially similar in operation and in ownership to a business entity taxable, or previously taxable, under section 183 of the Tax Law (New York State Franchise Tax on transportation and transmission corporations and associations), section 184 of the Tax Law (New York State Additional Franchise Tax on transportation and transmission corporations and associations), section 185 of the Tax Law (New York State Franchise Tax on farmers', fruit growers', and other like agricultural corporations organized and operated on a cooperative basis), section 186 of the Tax Law (New York State Franchise Tax on water-works companies, gas companies, electric or steam heating, lighting and power companies), article 9-A of the Tax Law (New York State Franchise Tax on business corporations), article 32 of the Tax Law (New York State Franchise Tax on banking corporations), article 33 of the Tax Law (New York State Franchise Tax on insurance corporations), article 23 of the Tax Law (New York State Unincorporated Business Income Tax) or which would have been subject to tax under such article 23 as such article was in effect on January 1, 1980, or the income (or loss) of which (or was) includible under article 22 of the Tax Law (New York State Personal Income Tax) whereby the intent and purpose of this paragraph with respect to the refunding of the investment credit or the retail enterprise credit to a new business would be evaded; or
(c) such individual has operated such new business entity for more than four years prior to the first day of the taxable year during which such individual first becomes eligible for the investment credit or the retail enterprise credit for which the refund of the unused investment credit or retail enterprise credit is claimed with respect to such new business entity.
(a) such individual has previously received a refund of an investment credit or a retail enterprise credit pursuant to this paragraph;
(b) the business of which such individual is an owner is substantially similar in operation and in ownership to a business entity taxable, or previously taxable, under section 183 of the Tax Law (New York State Franchise Tax on transportation and transmission corporations and associations), section 184 of the Tax Law (New York State Additional Franchise Tax on transportation and transmission corporations and associations), section 185 of the Tax Law (New York State Franchise Tax on farmers', fruit growers', and other like agricultural corporations organized and operated on a cooperative basis), section 186 of the Tax Law (New York State Franchise Tax on water-works companies, gas companies, electric or steam heating, lighting and power companies), article 9-A of the Tax Law (New York State Franchise Tax on business corporations), article 32 of the Tax Law (New York State Franchise Tax on banking corporations), article 33 of the Tax Law (New York State Franchise Tax on insurance corporations), article 23 of the Tax Law (New York State Unincorporated Business Income Tax) or which would have been subject to tax under such article 23 as such article was in effect on January 1, 1980, or the income (or loss) of which (or was) includible under article 22 of the Tax Law (New York State Personal Income Tax) whereby the intent and purpose of this paragraph with respect to the refunding of the investment credit or the retail enterprise credit to a new business would be evaded; or
(1) divide the total number of months of qualified use of the property by 36;
(2) multiply the amount computed in subclause ( 1 ) of this clause by the amount of the investment credit claimed on the property to ascertain the investment credit allowed for actual use;
(3) subtract the investment credit allowed for actual use from the investment credit claimed on the property to determine the amount of investment credit to be added back; and
(4) add the amount of investment credit to be added back to the ordinary tax due for the year the property was disposed of or ceased to qualify.
(c) such individual has operated such new business entity for more than four years prior to the first day of the taxable year during which such individual first becomes eligible for the investment credit or the retail enterprise credit for which the refund of the unused investment credit or retail enterprise credit is claimed with respect to such new business entity.
(iii)
(a) Except with respect to that qualified property referred to in subparagraph (iv) of this paragraph (a building or a structural component of a building), with respect to qualified property which is 5-year property, 10-year property and 15-year real property (as defined in section 168[c][2] of the Internal Revenue Code), and which is disposed of or ceases to be in qualified use prior to the end of 60 months, the difference between the investment credit taken and the investment credit allowed for actual use must be added back to the ordinary tax otherwise due in the year of disposition or disqualification.
(b) The amount of investment credit to be added back pursuant to clause ( a ) of this subparagraph is computed as follows:
(1) divide the total number of months of qualified use of the property by 60;
(2) multiply the amount computed in subclause ( 1 ) of this clause by the amount of the investment credit claimed on the property to ascertain the investment credit allowed for actual use;
(3) subtract the investment credit allowed for actual use from the investment credit claimed on the property to determine the amount of investment credit to be added back; and
(4) add the amount of investment credit to be added back to the ordinary tax due for the year the property was disposed of or ceased to qualify.
(c) An add-back, pursuant to clause ( a ) of this subparagraph, of the investment credit taken will not be required if the property is disposed of or ceases to be in qualified use after such property has been in qualified use for more than 60 months.
(a) Except with respect to that qualified property referred to in subparagraph (iv) of this paragraph (a building or a structural component of a building), with respect to qualified property which is 5-year property, 10-year property and 15-year real property (as defined in section 168[c][2] of the Internal Revenue Code), and which is disposed of or ceases to be in qualified use prior to the end of 60 months, the difference between the investment credit taken and the investment credit allowed for actual use must be added back to the ordinary tax otherwise due in the year of disposition or disqualification.
(b) The amount of investment credit to be added back pursuant to clause ( a ) of this subparagraph is computed as follows:
(1) divide the total number of months of qualified use of the property by 60;
(2) multiply the amount computed in subclause ( 1 ) of this clause by the amount of the investment credit claimed on the property to ascertain the investment credit allowed for actual use;
(3) subtract the investment credit allowed for actual use from the investment credit claimed on the property to determine the amount of investment credit to be added back; and
(4) add the amount of investment credit to be added back to the ordinary tax due for the year the property was disposed of or ceased to qualify.
(1) divide the total number of months of qualified use of the property by 60;
(2) multiply the amount computed in subclause ( 1 ) of this clause by the amount of the investment credit claimed on the property to ascertain the investment credit allowed for actual use;
(3) subtract the investment credit allowed for actual use from the investment credit claimed on the property to determine the amount of investment credit to be added back; and
(4) add the amount of investment credit to be added back to the ordinary tax due for the year the property was disposed of or ceased to qualify.
(c) An add-back, pursuant to clause ( a ) of this subparagraph, of the investment credit taken will not be required if the property is disposed of or ceases to be in qualified use after such property has been in qualified use for more than 60 months.
(d) condemnation of the property;
(e) a gift of the property;
(f) the contribution of the property to a partnership or corporation, unless a substantial interest in the ownership of the retail enterprise is retained by the transferor;
(g) loss of the property due to a fire, storm or other casualty;
(h) a legal dissolution of the taxpayer; and
(i) transfer upon foreclosure of a security interest in the property.
(iv)
(a) With respect to any recovery property to which section 168 of the Internal Revenue Code applies, which is a building or a structural component of a building and which is disposed of or ceases to be in qualified use prior to the end of the period over which the taxpayer chooses to deduct the property under section 168 of the Internal Revenue Code, the difference between the investment credit taken and the investment credit allowed for actual use must be added back to the ordinary tax otherwise due in the year of disposition or disqualification.
(b) The amount of investment credit to be added back pursuant to clause ( a ) of this subparagraph is computed as follows:
(1) divide the total number of months of qualified use of the property by the total number of months over which the taxpayer chose to deduct the property under section 168 of the Internal Revenue Code;
(2) multiply the amount computed in subclause ( 1 ) of this clause by the amount of the investment credit claimed on the property to ascertain the investment credit allowed for actual use;
(3) subtract the investment credit allowed for actual use from the investment credit claimed on the property to determine the amount of investment credit to be added back; and
(4) add the amount of investment credit to be added back to the ordinary tax due for the year the property was disposed of or ceased to qualify.
(c) An add-back, pursuant to clause ( a ) of this subparagraph, of the investment credit taken will not be required if the property is disposed of or ceases to be in qualified use for more than 12 consecutive years or after the end of the total number of months over which the taxpayer chose to deduct the property under section 168 of the Internal Revenue Code.
(a) With respect to any recovery property to which section 168 of the Internal Revenue Code applies, which is a building or a structural component of a building and which is disposed of or ceases to be in qualified use prior to the end of the period over which the taxpayer chooses to deduct the property under section 168 of the Internal Revenue Code, the difference between the investment credit taken and the investment credit allowed for actual use must be added back to the ordinary tax otherwise due in the year of disposition or disqualification.
(b) The amount of investment credit to be added back pursuant to clause ( a ) of this subparagraph is computed as follows:
(1) divide the total number of months of qualified use of the property by the total number of months over which the taxpayer chose to deduct the property under section 168 of the Internal Revenue Code;
(2) multiply the amount computed in subclause ( 1 ) of this clause by the amount of the investment credit claimed on the property to ascertain the investment credit allowed for actual use;
(3) subtract the investment credit allowed for actual use from the investment credit claimed on the property to determine the amount of investment credit to be added back; and
(4) add the amount of investment credit to be added back to the ordinary tax due for the year the property was disposed of or ceased to qualify.
(1) divide the total number of months of qualified use of the property by the total number of months over which the taxpayer chose to deduct the property under section 168 of the Internal Revenue Code;
(2) multiply the amount computed in subclause ( 1 ) of this clause by the amount of the investment credit claimed on the property to ascertain the investment credit allowed for actual use;
(3) subtract the investment credit allowed for actual use from the investment credit claimed on the property to determine the amount of investment credit to be added back; and
(4) add the amount of investment credit to be added back to the ordinary tax due for the year the property was disposed of or ceased to qualify.
(c) An add-back, pursuant to clause ( a ) of this subparagraph, of the investment credit taken will not be required if the property is disposed of or ceases to be in qualified use for more than 12 consecutive years or after the end of the total number of months over which the taxpayer chose to deduct the property under section 168 of the Internal Revenue Code.
(1) the expiration of its useful life, in the case of property depreciable pursuant to section 167 of the Internal Revenue Code; or
(2) the end of the total number of months over which the taxpayer chose to deduct the property under section 168 of the Internal Revenue Code, in the case of recovery property to which section 168 of the Internal Revenue Code applies; and
(d) property on which a retail enterprise credit was allowed and subsequently leased to others.
(v) For purposes of this paragraph, a disposition of qualified property includes, but is not limited to:
(a) a sale of the property;
(b) the sale by a partner of his interest in a partnership;
(c) an exchange of qualified property for other property of like kind (including a trade-in of qualified property);
(d) condemnation of the property;
(e) a gift of the property;
(f) the contribution of property to a partnership or corporation, unless a substantial interest in the ownership of the trade or business is retained by the transferor;
(g) loss of the property due to fire, theft, storm or other casualty;
(h) a legal dissolution of the taxpayer; and
(i) transfer upon foreclosure of a security interest in the property.
(a) a sale of the property;
(b) the sale by a partner of his interest in a partnership;
(c) an exchange of qualified property for other property of like kind (including a trade-in of qualified property);
(d) condemnation of the property;
(e) a gift of the property;
(f) the contribution of property to a partnership or corporation, unless a substantial interest in the ownership of the trade or business is retained by the transferor;
(g) loss of the property due to fire, theft, storm or other casualty;
(h) a legal dissolution of the taxpayer; and
(i) transfer upon foreclosure of a security interest in the property.
(vi) For purposes of this paragraph, property which ceases to be in qualified use includes, but is not limited to:
(a) property which no longer has a situs in New York State;
(b) property which is no longer used in the production of goods or as an air pollution control facility, a water pollution control facility or a research or development facility;
(c) qualified property which has been converted to personal use;
(d) qualified property which was retired prior to:
(1) the expiration of its useful life in the case of property depreciable pursuant to section 167 of the Internal Revenue Code;
(2) 36 months in the case of three-year property (as defined in section 168[c][2] of the Internal Revenue Code) for which a recovery deduction is allowable under section 168 of the Internal Revenue Code;
(3) 60 months in the case of 5-year property, 10-year property and 15-year real property (as defined in section 168[c][2] of the Internal Revenue Code) for which a recovery deduction is allowable under section 168 of the Internal Revenue Code; or
(4) the end of the total number of months over which the taxpayer chose to deduct the property under section 168 of the Internal Revenue Code in the case of any recovery property to which section 168 of the Internal Revenue Code applies which is a building or a structural component of a building; and
(e) property on which an investment credit was allowed and subsequently leased to others.
(a) property which no longer has a situs in New York State;
(b) property which is no longer used in the production of goods or as an air pollution control facility, a water pollution control facility or a research or development facility;
(c) qualified property which has been converted to personal use;
(d) qualified property which was retired prior to:
(1) the expiration of its useful life in the case of property depreciable pursuant to section 167 of the Internal Revenue Code;
(2) 36 months in the case of three-year property (as defined in section 168[c][2] of the Internal Revenue Code) for which a recovery deduction is allowable under section 168 of the Internal Revenue Code;
(3) 60 months in the case of 5-year property, 10-year property and 15-year real property (as defined in section 168[c][2] of the Internal Revenue Code) for which a recovery deduction is allowable under section 168 of the Internal Revenue Code; or
(4) the end of the total number of months over which the taxpayer chose to deduct the property under section 168 of the Internal Revenue Code in the case of any recovery property to which section 168 of the Internal Revenue Code applies which is a building or a structural component of a building; and
(1) the expiration of its useful life in the case of property depreciable pursuant to section 167 of the Internal Revenue Code;
(2) 36 months in the case of three-year property (as defined in section 168[c][2] of the Internal Revenue Code) for which a recovery deduction is allowable under section 168 of the Internal Revenue Code;
(3) 60 months in the case of 5-year property, 10-year property and 15-year real property (as defined in section 168[c][2] of the Internal Revenue Code) for which a recovery deduction is allowable under section 168 of the Internal Revenue Code; or
(4) the end of the total number of months over which the taxpayer chose to deduct the property under section 168 of the Internal Revenue Code in the case of any recovery property to which section 168 of the Internal Revenue Code applies which is a building or a structural component of a building; and
(e) property on which an investment credit was allowed and subsequently leased to others.
(vii) See subparagraph (b)(1)(iii) of this section for determining the amount of investment credit on property that is disposed of or that ceases to qualify for such credit prior to the end of the taxable year in which the investment credit is to be taken.
(2) Retail enterprise credit.
(i)
(a) With respect to a qualified rehabilitated building which is depreciable, pursuant to section 167 of the Internal Revenue Code, and which is disposed of or otherwise ceases to qualify for the retail enterprise credit prior to the end of its useful life, the difference between the retail enterprise credit taken and the retail enterprise credit allowed for the period the property qualified for such credit must be added back to the ordinary tax otherwise due in the year of disposition or disqualification.
(b) The amount of retail enterprise credit to be added back pursuant to clause ( a ) of this subparagraph is computed as follows:
(1) divide the total number of months the property qualified for the retail enterprise credit by the total number of months of useful life;
(2) multiply the amount computed in subclause ( 1 ) of this clause by the amount of the retail enterprise credit claimed on the property to ascertain the retail enterprise credit allowed for the period the property qualified for the retail enterprise credit;
(3) subtract the retail enterprise credit allowed for the period the property qualified for such credit from the retail enterprise credit claimed on the property to determine the amount of retail enterprise credit to be added back; and
(4) add the amount of retail enterprise credit to be added back to the ordinary tax due for the year the property was disposed of or otherwise ceased to qualify.
(c) An add-back, pursuant to clause ( a ) of this subparagraph, of the retail enterprise credit taken will not be required if the property is disposed of or otherwise ceases to qualify for such credit after such property has qualified for the retail enterprise credit for more than 12 consecutive years or after the end of such property's useful life.
(d) As used in this subparagraph, the useful life of property is the same number of years as the taxpayer uses for Federal depreciation purposes pursuant to section 167 of the Internal Revenue Code.
(ii)
(a) With respect to any recovery property, to which section 168 of the Internal Revenue Code applies, which is a qualified rehabilitated building and which is disposed of or otherwise ceases to qualify for the retail enterprise credit prior to the end of the period over which the taxpayer chooses to deduct the property under section 168 of the Internal Revenue Code, the difference between the retail enterprise credit taken and the retail enterprise credit allowed for the period the property qualified for such credit must be added back to the ordinary tax otherwise due in the year of disposition or disqualification.
(b) The amount of retail enterprise credit to be added back pursuant to clause ( a ) of this subparagraph is computed as follows:
(1) divide the total number of months the property qualified for the retail enterprise credit by the total number of months over which the taxpayer chose to deduct the property under section 168 of the Internal Revenue Code;
(2) multiply the amount computed in subclause ( 1 ) of this clause by the amount of the retail enterprise credit claimed on the property to ascertain the retail enterprise credit allowed for the period the property qualified for the retail enterprise credit;
(3) subtract the retail enterprise credit allowed for the period the property qualified for such credit from the retail enterprise credit claimed on the property to determine the amount of retail enterprise credit to be added back; and
(4) add the amount of retail enterprise credit to be added back to the ordinary tax due for the year the property was disposed of or otherwise ceased to qualify.
(c) An add-back, pursuant to clause ( a ) of this subparagraph, of the retail enterprise credit taken will not be required if the property is disposed of or otherwise ceases to qualify for such credit after such property has qualified for the retail enterprise credit for more than 12 consecutive years or after the end of the total number of months over which the taxpayer chose to deduct the property under section 168 of the Internal Revenue Code.
(iii) For purposes of this paragraph, disposition of a qualified rehabilitated building includes, but is not limited to:
(a) a sale of the property;
(b) the sale by a partner of his interest in a partnership;
(c) an exchange of the qualified rehabilitated building for other property;
(d) condemnation of the property;
(e) a gift of the property;
(f) the contribution of the property to a partnership or corporation, unless a substantial interest in the ownership of the retail enterprise is retained by the transferor;
(g) loss of the property due to a fire, storm or other casualty;
(h) a legal dissolution of the taxpayer; and
(i) transfer upon foreclosure of a security interest in the property.
(iv) For purposes of this paragraph, property which ceases to qualify for the retail enterprise credit includes, but is not limited to:
(a) property which is no longer used in the retail sales activity of a retail enterprise;
(b) property which has been converted to personal use;
(c) property which was retired prior to:
(1) the expiration of its useful life, in the case of property depreciable pursuant to section 167 of the Internal Revenue Code; or
(2) the end of the total number of months over which the taxpayer chose to deduct the property under section 168 of the Internal Revenue Code, in the case of recovery property to which section 168 of the Internal Revenue Code applies; and
(d) property on which a retail enterprise credit was allowed and subsequently leased to others.
(v) See subparagraph (b)(2)(iii) of this section for determining the amount of retail enterprise credit on property that is disposed of or that otherwise ceases to qualify for such credit prior to the end of the taxable year in which the retail enterprise credit is to be taken.