| IMPORTANT
UPDATE
The state has imposed a three-year aggregate cap on the conservation tax credit program for years 2011, 2012 and 2013 as a way to help address the state’s budget shortfall crisis. This went into effect on January 1, 2011and will sunset on December 31, 2013. In May 2011, House Bill 11-1300 was signed into law which, among other things, changes the allocation of the three-year aggregate cap of $78 million. This means only $22 million in conservation tax credits will be issued by the Division of Real Estate (DRE) for 2011, $22 million for 2012 and $34 million for 2013, for an aggregate total of $78 million. DRE, which administers the tax credit cap program, anticipates the $22 million tax credit cap for 2012 will be met sometime in the summer. It is possible that the three-year aggregate tax credit cap of $78 million could also be met in 2012.
The cap impacts both the supply and demand of available tax credits. It will be important for taxpayers who want to purchase tax credits to secure these credits as early as possible in 2012, because there will be fewer credits available in the market. Credits may not be available later in the year.
Taxpayers can purchase tax credits to offset their 2012 state income tax liability thereby eliminating the need to submit quarterly estimated payments to the Department of Revenue
REGISTRATION
Register with CTCT by completing the CTCT
2012 Buyer Registration Form [click
here].
WHO
CAN PURCHASE TAX CREDITS?
Colorado resident taxpayers, individuals,
trusts and C corporations, can purchase
conservation tax credits. There is no
limit on the amount that can be purchased.
TRANSFER
PROCESS
CTCT conducts a thorough due diligence
review of all seller donation documents
to ensure that we provide quality tax
credits for our buyers.
Once CTCT has accepted a
credit for transfer, we match you with
a credit seller. Both buyers and sellers
execute CTCT’s Agreement to Purchase/Sell.
Transfers are completed by delivering
signed copies of the Agreement to both
parties and checks from you to the sellers.
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TAX FILING
PAPERWORK
After the credits are sold, we prepare the required
paperwork documenting the completed transaction
for both sellers and you to file with your Colorado
state income tax return. This includes completing
Department of Revenue (DR) Form 1305.
GOING MARKET RATE
The limited supply of tax credits under the
new cap program will affect the 2012 credit
transfer rate. Credit buyers will receive a
discount on the face value of the credit purchased
based on the "going market rate."
Historically, the credit buyer has purchased
credit at a fifteen percent (15%) discount.
This rate can change over the course of the
"transfer year" based on supply and
demand. We transfer credits throughout the "transfer
year." Please check with us about the current
discount rate.
Credit buyers can apply
the full face value of the credit (not the purchase
price) toward their Colorado state income tax
liability and claim that amount as a Colorado
state income tax deduction on their federal
tax return.
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