11531: 3468 - Investment Credit

The credit amounts on Form 3468 do not calculate in the partnership and S corp packages as it is a pass-through credit. The final credit is figured at the partner or shareholder level on their individual return. The form instructions require that the basis amounts for the various types of property be carried to the Schedule K on the Form 1065 and Form 1120-S. These amounts are then allocated to each partner or shareholder based on ownership percentages. 

K-1 Form 3468 is produced for each partner/shareholder. In addition, a statement is included with each K-1 showing the relevant Form 3468 line and allocated amounts for use by the partner/shareholder. Codes may vary depending on the type of property. 

In an individual 1040, these amounts are entered directly on the applicable line(s) of screen 3468 and there are no corresponding codes in the K1P or K1S data entry screens. Any eligible credit flows from Form 3468 to Form 3800 and then to Form 1040. 

For more information, review the Instructions for Form 3468, the Partner's Instructions for Schedule K-1, and the Shareholder's Instructions for Schedule K-1.