OMB No. 1545–1029 Form 8693 Low-Income Housing Credit Disposition Bond

(Rev. February 1997) (For use by taxpayers posting bond under section 42(j)(6))

Attachment

Sequence No. 91 Department of the Treasury

Internal Revenue Service Attach to your return after receiving IRS approval.

Name of taxpayer making disposition Identifying number

Bonding

1 Address of building as shown on Form 8609 (do not use P.O. box) 2 Building identification number

3 Date the 15-year compliance period ends

5 Date property 6 Date bond issued

interest disposed of

4 Check the box that applies:

This is an

( ) 7a Bond is given by

Principal Telephone number (optional)

Address

as principal and

Surety

as surety or sureties.

Address

As principal and surety, we are obligated to the United States in the amount of $ . We also

jointly and severally obligate our heirs, executors, administrators, successors, and assigns for the payment of this amount.

7b

Signatures

Under penalties of perjury, I declare that I have examined this form and any accompanying statements, and to the best of my knowledge and belief,

they are true, correct, and complete.

Signature of principal Name (please print) Date

Signature of principal Name (please print)

Signature of surety Name and identifying number (please print) Date

Signature of surety Name and identifying number (please print)

Certificate of Corporate Principal (corporations only)

I certify that the person above, who signed on behalf of the principal, was an authorized representative of the corporation.

Signature of secretary of the corporation Name (please print) Date

Approval by IRS (See instructions.)

Bond approved

Date Internal Revenue Service official

Paperwork Reduction Act

Notice

If you have comments concerning the

accuracy of these time estimates or

suggestions for making this form simpler, we

would be happy to hear from you. You can

write to the Tax Forms Committee, Western

Area Distribution Center, Rancho Cordova,

CA 95743-0001. DO NOT send Form 8693 to

this address. Instead, see When and Where

To File on page 2.

Part IV

Part I

Part II

Part III

Cat. No. 10298Y Form 8693 (Rev. 2-97)

We ask for the information on this form to

carry out the Internal Revenue laws of the

United States. You are required to give us the

information. We need it to ensure that you are

complying with these laws and to allow us to

figure and collect the right amount of tax.

original bond, strengthening bond, or superseding bond.

Date

Date

Learning about the 

law or the form 14 min.

The time needed to complete and file this

form will vary depending on individual

circumstances. The estimated average time

is:

Recordkeeping 13 min.

General Instructions

Section references are to the Internal

Revenue Code.

Purpose of Form

Use Form 8693 to post a bond under section

42(j)(6) to avoid recapture of the low-income

housing credit.

Preparing, copying, 

assembling, and sending

the form to the IRS 40 min.

You are not required to provide the

information requested on a form that is

subject to the Paperwork Reduction Act

unless the form displays a valid OMB control

number. Books or records relating to a form

or its instructions must be retained as long as

their contents may become material in the

administration of any Internal Revenue law.

Generally, tax returns and return information

are confidential, as required by section 6103.
Form 8693 (Rev. 2-97) Page 2

When the IRS returns a copy of the

approved form, attach a copy of it to your

income tax return for the year in which the

disposition occurred. Write “FORM 8693

ATTACHED” to the left of the entry space on

your income tax return for reporting the

recapture of the low-income housing credit.

Line 7b. Amount of Bond.—Use the

worksheet below to calculate the bond

amount. See Rev. Rul. 90-60 for additional

information on the methodology for

determining the bond amount.

Specific Instructions

Line 2. Building Identification Number

(BIN).—This is the number assigned to the

building by the housing credit agency on Part

I, item E, of Form 8609, Low-Income Housing

Credit Allocation Certification.

If the amount is not an even multiple of

$100, increase the bond amount to the next

higher multiple of $100.

Partnerships

Section 42(j)(5) partnerships.—Any person

holding a power of attorney in a section

42(j)(5) partnership (a partnership with 35 or

more partners that has not elected out of the

section 42(j)(5) provisions) may post bond as

principal on behalf of the partnership. A bond

posted on behalf of a partnership must be

posted in the partnership’s name, with the

name of the authorized representative of the

partnership posting the bond appearing

immediately below the partnership’s name.

Qualifying Sureties

Partnerships that elected out of the section

42(j)(5) provisions or have fewer than 35

partners.—If partners in partnerships to which

section 42(j)(5) does not apply want to post

bond, the partners must post bond in their

individual capacity as principals.

Surety Termination Part III. Certificate of Corporate

Principal.—If the principal is a corporation,

the authority of the person posting the bond

must be certified by the secretary of the

corporation by completing Part III. Or the

corporation may attach copies of records that

will show the authority of the officer signing if

the copies are certified by the secretary to be

true copies.

A taxpayer may not be a surety for itself,

nor may a member of a firm or a partner in a

partnership be a surety for the firm or

partnership of which he or she is a member

or a partner.

Period of Bond

Part IV. Approval by the IRS.—The IRS will

notify you of the approval or rejection of the

bond. If approved, the IRS will send a copy of

the approved Form 8693 to the principal

shown in Part I. If rejected, the owner must

recapture the allowed low-income housing

credit. Use Form 8611, Recapture of

Low-Income Housing Credit.

Recordkeeping

Worksheet for Computing Bond Amount

Total credits taken by you in previous years and any additional credits

you anticipate claiming for any year or portion thereof preceding the

date of disposition

1

$

Who Must File

2 Bond factor amount

3 Percentage of taxpayer’s total interest in the qualified low-income

building disposed of %

Line 2. Bond Factor Amount.—Enter the

bond factor amount corresponding to the

month in the compliance period in which the

disposition occurred and the first year of the

building’s credit period. The IRS announces

the monthly bond factor amounts quarterly in

a revenue ruling published in the Internal

Revenue Bulletin.

Instructions for Worksheet

When and Where To File

Line 1.—Enter the total amount of the credits

claimed on the building. See Part I of Forms

8586 you have filed. Include any additional

credits you anticipate claiming for any period

preceding the date of disposition. Do not

include credit amounts previously recaptured,

credit amounts for which a bond was

previously posted, or credits claimed on

additions to qualified basis as determined

under section 42(f)(3).

Line 3.—Enter the ownership interest in the

qualified low-income building that you have

disposed of. Include ownership interests held

both directly and indirectly (e.g., through a

partnership).

4 Bond amount required to be posted (line 1 3 line 2 3 line 3). Enter

here and on line 7b $

The company acting as surety must hold a

Certificate of Authority from the Department

of the Treasury, Financial Management

Service. These companies are listed in

Treasury Circular 570. You may get a copy of

this circular by writing to the Department of

the Treasury, Financial Management Service,

Surety Bond Branch, 3700 East West Hwy.,

Hyattsville, MD 20782, or by calling (202)

874-6850 (not a toll-free number).

The liability stated on the bond must be for

the period of years remaining in the 15-year

compliance period of the building plus an

additional 58 months. The compliance period

begins with the tax year the building was

placed in service or the succeeding tax year if

the election under section 42(f)(1) is made.

If a surety’s certificate of authority is

terminated, the surety may be relieved of

liability under the bond provided it notifies the

principal and the IRS by the date the

termination announcement is published in the

Federal Register. The notice must be sent by

certified mail and must state that the principal

has 60 days from the date the termination

announcement is published in the Federal

Register to get an adequate strengthening or

superseding bond with another surety listed

in Treasury Circular 570. If notice is given, the

principal’s rights under the bond will end 60

days after the date the termination

announcement is published in the Federal

Register.

Keep a copy of this Form 8693 together with

all Forms 8586, 8609, Schedule(s) A (Form

8609), and 8611 for 58 months after the

15-year compliance period ends.

Taxpayers who claimed a low-income

housing credit on a residential rental building

and later (in a tax year during the 15-year

compliance period) disposed of the building

or an ownership interest in it must file this

form to avoid recapture of the credit claimed.

A de minimis rule may apply to certain

dispositions of interests in partnerships that

own buildings in which a credit was claimed.

See Rev. Rul. 90-60, 1990-2 C.B. 3, for

additional information.

Submit the original and one copy of Form

8693 to the Internal Revenue Service Center,

Philadelphia, PA 19255, within 60 days after

the date of disposition of the building or

interest therein. The completed form may be

submitted by either the taxpayer or the

surety.

%

A qualified surety (or coinsuring surety)

may terminate its liability on a bond only if

the surety notifies the principal and the IRS at

least 60 days before the date the surety

wants to terminate its liability. The notice

must state that the principal has 60 days

from the termination date to obtain an

adequate superseding or strengthening bond

from another qualified surety (or coinsuring

surety).

If the surety does not provide this notice, it

remains liable for the amount posted on the

bond. If the surety gives notice but does not

meet the 60-day notification requirement or

fails to include a termination date in the

notice, the surety’s liability will terminate 60

days after the postmark date on the notice.

Send the IRS copy of the notice to the

Internal Revenue Service Center, Philadelphia,

PA 19255.

If the principal fails to post a strengthening

or superseding bond within 60 days from the

date (a) the termination announcement is

published in the Federal Register or (b) on

which a surety’s liability on a bond

terminates, recapture under section 42(j) is

required.

● Does not attempt to defraud the United

States of any tax under section 42(j);

● Files all returns and statements as required

by law or regulations;

● Pays all taxes including any penalties and

interest charges; and

● Complies with all other requirements of the

law and regulations under section 42.

The bond ensures payment of the

recapture tax imposed under section 42(j).

The conditions of the bond are that the

principal (i.e., taxpayer):