K-35: Historic Preservation Credit Schedule (2024)

Who files this form

Use Schedule K-35 to claim the Kansas Historic Preservation Credit for qualified rehabilitation expenditures or an acquired credit.

For a rehabilitation project, the credit is available to a qualified taxpayer who spends at least $5,000 to restore or preserve a qualified historic structure under an approved rehabilitation plan. A qualified taxpayer is the structure’s owner or another person who may qualify for the federal rehabilitation credit under section 47 of the Internal Revenue Code.

Partners, shareholders, and members of pass-through entities claim their proportionate shares of the credit. Complete a separate K-35 for each qualified historic structure.

What you'll need

Have the following information ready:

• Taxpayer name and Social Security number or EIN, plus pass-through entity information if applicable.
• Project and certificate numbers, the historic property’s name and address, and project start and completion dates.
• Total qualified rehabilitation expenses and your proportionate share percentage.
• Your prior-year K-35 if claiming a carryforward, and your Kansas tax liability after other credits.

The printed instructions say to keep copies of these records:

• Tax credit certificate from the Kansas State Historical Society.
• Federal Form 3468, if applicable.
• An itemized list of actual costs and expenses.
• Certificate of Transfer from the Kansas State Historical Society, if claiming an acquired credit.

Conflicting enclosure directions: Part B says you must enclose the Certificate of Transfer when claiming an acquired credit. The printed instructions say not to send any enclosures and instead to keep these records. For assistance completing the schedule, the listed Kansas Department of Revenue phone number is 785-368-8222.

How to file

Complete a separate Schedule K-35 for each qualified historic structure.

1. Enter the property and project information in Parts A and B.
2. Calculate the available credit and your share in Part C. For the first year of an acquired credit, skip lines 1 and 2 and enter the transferred credit on line 3.
3. In Part D, add any prior-year carryforward and compare the available credit with your Kansas tax liability after other credits.
4. Enter the smaller of lines 7 and 8 on line 9 and on the appropriate nonrefundable credit line of Form K-40, K-41, K-120, or K-130.
5. If line 9 is less than line 7, complete line 10 to calculate the carryforward.

The supplied text does not give mailing or e-filing directions. The addresses printed on it are assistance contacts, not identified filing destinations.

Common mistakes

• Including excluded costs. Line 1 must not include costs attributable to associated additions, furnishings, land, landscaping, lighting fixtures, parking lots, or site work.
• Combining properties on one schedule. Complete a separate schedule for each qualified historic structure.
• Entering an acquired credit on the wrong line. In the first claim year, skip lines 1 and 2 and enter the transferred amount on line 3. In later years, enter the acquired credit carryforward on line 6.
• Using the wrong share percentage. Pass-through owners enter their proportionate share on line 4. All other taxpayers enter 100%.
• Missing the carryforward calculation. Complete line 10 when line 9 is less than line 7, and enter that amount on line 6 of next year’s K-35.

Questions people ask

What credit percentages are listed for 2024?

The general rate is 25% of qualified expenditures. The instructions also list 30% for a qualified historic structure in a city with a population between 9,500 and 50,000, and 40% for one in a city with fewer than 9,500 people. A separate 30% category applies to a qualified historic structure that is exempt from federal income tax under section 501(c)(3) and is not income producing. Each category requires at least $5,000 in qualified expenditures.

When can I claim the state credit?

The state credit is generally available in the same tax year as the federal credit. If the project does not qualify for the federal credit, the state credit is taken in the year the qualified rehabilitation plan was placed in service.

Can I carry unused credit forward?

Yes. Unused project credit may be carried forward until used, but not beyond the 10th taxable year after the year the qualified rehabilitation plan was placed in service. Acquired credit may be carried forward for up to five years, but all of it must be claimed within 10 years after the tax year the plan was first placed in service.

Can credits be sold or transferred?

Yes. Credits allowed and earned may be sold, assigned, or otherwise transferred. The recipient may use the acquired credit for either the tax year the rehabilitation plan was first placed in service or the year the credit was acquired.

Official sources

• https://www.ksrevenue.gov/pdf/k-3524.pdf