Reg. § 1.6418-1 Transfer of eligible credits.
(a) Transfer of eligible credits An eligible taxpayer may make a transfer election under 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 regulations (defined in of this section). through of this section provide definitions of terms for purposes of applying section and the section regulations. See 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 for special rules pertaining to transfer elections made by partnerships or S corporations. See for pre-filing registration requirements and other information required to make any transfer election effective. See 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 and .
(c) Eligible credit
(1) In general The term eligible credit is a credit described in 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 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 of this section determined with respect to that single eligible credit property. The eligible credits described in this 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 , is treated as a credit listed in section 38(b) of the Code (section credit).
(ii) Renewable electricity production The renewable electricity production credit determined under section 45(a) of the Code (section credit).
(iii) Carbon oxide sequestration The credit for carbon oxide sequestration determined under section 45Q(a) of the Code (section credit).
(iv) Zero-emission nuclear power production The zero-emission nuclear power production credit determined under section 45U(a) of the Code (section credit).
(v) Clean hydrogen production The clean hydrogen production credit determined under section 45V(a) of the Code (section credit).
(vi) Advanced manufacturing production The advanced manufacturing production credit determined under section 45X(a) of the Code (section credit).
(vii) Clean electricity production The clean electricity production credit determined under section 45Y(a) of the Code (section credit).
(viii) Clean fuel production The clean fuel production credit determined under section 45Z(a) of the Code (section credit).
(ix) Energy The energy credit determined under section 48 of the Code (section credit).
(x) Qualifying advance energy project The qualifying advanced energy project credit determined under section 48C of the Code (section credit).
(xi) Clean electricity The clean electricity investment credit determined under section 48E of the Code (section credit).
(3) Bonus credit amounts The bonus credit amounts described in this are:
(i) In the case of a section credit, the increased credit amounts for which the requirements under section and (3) are satisfied.
(ii) In the case of a section credit, the increased credit amounts for which the requirements under section , (9), and (11) are satisfied.
(iii) In the case of a section credit, the increased credit amounts for which the requirements under section and (4) are satisfied.
(iv) In the case of a section credit, the increased credit amount for which the requirements under section are satisfied.
(v) In the case of a section credit, the increased credit amounts for which the requirements under section and (4) are satisfied.
(vi) In the case of a section credit, the increased credit amounts for which the requirements under section , (9), (10), and (11) are satisfied.
(vii) In the case of a section credit, the increased credit amounts for which the requirements under section and (7) are satisfied.
(viii) In the case of a section credit, the increased credit amounts for which the requirements under section , (11), (12), (14), and (e) are satisfied.
(ix) In the case of a section credit, the increased credit amounts for which the requirements under section and (6) are satisfied.
(x) In the case of a section credit, the increased credit amounts for which the requirements under section , (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 through of this section with respect to which the amount of an eligible credit is determined:
(1) In the case of a section credit, a qualified alternative fuel vehicle refueling property described in section .
(2) In the case of a section credit, a qualified facility described in section .
(3) In the case of a section credit, a component of carbon capture equipment within a single process train described in .
(4) In the case of a section credit, a qualified nuclear power facility described in section .
(5) In the case of a section credit, a qualified clean hydrogen production facility described in section .
(6) In the case of a section credit, a facility that produces eligible components, as described in guidance under sections and .
(7) In the case of a section credit, a qualified facility described in section .
(8) In the case of a section credit, a qualified facility described in section .
(9) Section 48 property
(i) In general In the case of a section credit and except as provided in of this section, an energy property described in section .
(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 and the election requirements of through , an energy project as described in section and defined in guidance.
(10) In the case of a section credit, an eligible property described in section .
(11) In the case of a section credit, a qualified facility as defined in section or, in the case of a section credit relating to a qualified investment with respect to energy storage technology, an energy storage technology described in section .
(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 and .
(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 ); 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 of this section during the time period described in of this section.
(g) Section 6418 regulations The term section regulations means through .
(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 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 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 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 , -3, and -5, provided the taxpayers apply the rules in their entirety and in a consistent manner.
[T.D. 9993, 89 FR 34800, Apr. 30, 2024; 89 FR 67860, Aug. 22, 2024]