Form 3800 and the Transfer Election Statement: How a Credit Purchase Is Reported

The return is where a credit transfer is proven. These are the filing mechanics CPAs need to get right.

Seller side

1. Obtain the IRS registration number for each credit property (valid for one tax year; changes in ownership require an amended registration).
2. Complete the specific credit form with the registration number.
3. On Form 3800, complete the Part III lines for a transfer election and attach the transfer election statement.
4. File by the due date, including extensions, for the year the credit is determined; the election is irrevocable (§6418(e)(1)).

Buyer side

1. Obtain the registration number and the information in the transfer election statement.
2. Attach the transfer election statement to the return for the year the credit is taken into account (§6418(d); IRS FAQ Q6).
3. Report the credit with the registration number; individuals and closely held entities apply the passive limits first, on Form 8582-CR or Form 8810 (§469).

What the statement contains

Per the IRS FAQ (Q6): name, address and TIN for both parties; the type and amount of the credit transferred; the timing and amount of cash paid; the registration number; and representations required by guidance. The form and substance are set by §1.6418-2.

Common errors

• Filing before registration is complete.
• Cash amounts that differ from the contract.
• Mismatched tax years between buyer and seller (calendar planning).
• Overlooking excessive credit transfer exposure: the excess plus a 20% addition unless reasonable cause (§6418(g)(2)).

Return-season timeline

When	Action
Before signing	Registration number in hand; draft election statement agreed
Year of purchase	Estimated tax reflects the credit if supportable
Return preparation	Specific credit form, Form 3800 and passive limit forms where required
Filing	Attach the transfer election statement; keep the diligence file
Following years	Annual registration for each year an election is made

A registration number is tax-year specific, so multi-year production credits require renewed registration each year an election is made.

Educational. Always confirm against the current Form 3800 instructions and the final regulations.