BUYING TAX CREDITS

 

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. 

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, 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 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 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.

 

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 supply of tax credits under the cap program affects the 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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Conservation Tax Credit Transfer, LLC ..l ..P.O. Box 898 ..l ..Morrison, CO 80465
Tel: (303) 988-1700 ..l ..Fax: (303) 313-3510

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