Colorado Department of Revenue 
Taxpayer Service Division 
01/11 
                           
                          Income 1 
                          Historic Property Preservation Income Tax Credit 

GENERAL INFORMATION 
Colorado offers an income tax credit to Colorado resident individuals and C corporations for the preservation and 
rehabilitation of a qualified historic property. The structure must be at least 50 years old, and must be:  a) designated 
individually or as a contributing property in the State Register of Historic Places; b) designated as a landmark by a 
certified local government; or c) designated as a contributing property in a designated historic district of a certified 
local government. If the property on which a taxpayer wants to claim this credit has none of these designations, the 
taxpayer must apply for and secure such a designation. [§39-22-514, C.R.S.] 
 
How to Qualify 
In order to qualify for the historic preservation income tax credit, a taxpayer must be the property owner or tenant 
with a lease  of five or more years. The project must  involve physical  rehabilitation work  and must preserve the 
historic  character of the building. Qualified  rehabilitation costs must exceed $5,000,  and the project must be 
completed within 24 months (one extension of time may be applied for).  The project must receive initial approval 
from the reviewing agency between January 1, 1991 and December 31, 2019, and the taxpayer may claim the tax 
credit only for work completed by December 31, 2019.  
 
The Colorado Historical Society has  adopted regulations  governing the criteria and procedures for  approval of 
rehabilitation projects for which the taxpayer intends to claim this tax credit. Reviewing agencies for these projects 
are the Colorado Historical Society or a certified local government. For detailed information on the approval process, 
for a list of certified local governments, and for application and certification forms, contact the Colorado Historical 
Society, Office of Archaeology and Historic Preservation, at www.coloradohistory-oahp.org, or at (303) 866-3395. 
 
If a taxpayer is claiming the federal rehabilitation tax credit for the restoration project (under section 38 of the Internal 
Revenue Code), no additional approval for state credits is required. The state tax credit may be claimed on the basis 
of approvals secured for the federal credit.  
   
AVAILABLE INCOME TAX CREDIT 
The state income tax credit is 20% of qualified rehabilitation costs up to a maximum $50,000 credit per qualified 
property.  In  any given tax year, the allowable  credit cannot exceed the  amount of tax liability for the  year. Any 
excess credit may be carried forward for a maximum of 10 years. 
 
If the qualified rehabilitation project is located in an enterprise zone, the credit may not be taken in conjunction with 
the state income tax credit allowed for the rehabilitation of a vacant building in an enterprise zone [§39-30-105.6, 
C.R.S.]. The 25% enterprise zone credit is allowed for the qualified costs of rehabilitating a building that is at least 20 
years old; has been completely vacant for at least two years; and is renovated for commercial uses. If a rehabilitation 
project qualifies for both credits, the taxpayer must choose one or the other. For more information, see FYI Income 
24, Tax Credit for the Rehabilitation of Vacant Buildings in an Enterprise Zone. 
 
How to Claim Credit 
Individuals should claim this credit on the Individual Credits Schedule (104CR).  Corporations should claim the credit 
on the Corporation Credit Schedule (112CR). The project must be completed before the credit is taken (except that if 
it is not completed by December 31, 2019, a partial credit may be claimed for 2019) and the credit must be taken for 
the year in  which the  project is completed, except  as described under "Conditional  Availability".  (See  section 
pertaining to "Conditional Availability" in this FYI).  A “Verification of Qualified Nature  of Historic Preservation 
Expenditures” form (issued by the reviewing agency) must  be attached to the Colorado income tax  return  when 
claiming the  credit. If a taxpayer is  claiming the federal  rehabilitation tax credit for this  project, no  supporting 
documentation is required by the Department of Revenue. 
 
If the property is owned (or leased) by more than one taxpayer, all involved may share in the tax credit, provided the 
group jointly submitted the initial application and fees [§39-22-514 (3) (a) (I), C.R.S.]. The credit may  be divided 
evenly among the total number of taxpayers. It may also be divided in differing proportions, provided the group had 
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submitted to the reviewing agency a binding agreement,  signed by all members sharing the credit, stating the 
manner in which the credit is to be divided. A copy of this agreement must be attached to the taxpayer’s income tax 
return. No  matter how many taxpayers are  sharing  it, the total allowable  credit per property is 20%, or $50,000 
maximum. 
 
RECAPTURE OF CREDIT 
If a taxpayer takes the tax credits and then decides to sell the property (or terminate the lease) within five years, the 
taxpayer must recapture to the Department of Revenue all or a portion of the credit used according to the following 
formula: 
 
 within the first year    100% 
 within the second year   80% 
 within the third year    60% 
 within the fourth year   40% 
 within the fifth year    20% 
 
CONDITIONAL AVAILABILITY  
Beginning in 2011 the availability of the historic property  preservation income tax credit for a given year will be 
contingent upon sufficient revenue growth* for that year.  If a credit cannot be claimed for the tax year in which it 
accrued because sufficient growth is not expected, it may be claimed for the next tax year for which a sufficient 
growth is anticipated.  The availability of this credit for any tax year beginning subsequent to December 31, 2010 will 
be posted on the Department of Revenue  Web site once it has been determined. See: 
https://www.colorado.gov/tax/income-tax-credits 
[§39-22-514(11.7), C.R.S] 
 
This conditional availability applies only to credits generated in tax years 2011 and later. Unused credit from tax year 
2010 and earlier can be carried forward and used in later tax years regardless of whether there is sufficient revenue 
growth. 
 
*Availability of the credit is contingent upon the December legislative council revenue forecast issued prior to the tax year and that the general 
fund appropriation must grow 6% over the previous year. 
  
FYIs provide general information concerning a variety of Colorado tax topics in simple and straightforward language. Although the FYIs represent 
a good faith effort to provide accurate and complete tax information, the information is not binding on the Colorado Department of Revenue, nor 
does it replace, alter, or supersede Colorado law and regulations. The Executive Director, who by statute is the only person having the authority to 
bind the Department, has not formally reviewed and/or approved these FYIs. 

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