SCHEDULE A

(Form 8609)

0MB No. 1545-0988

Expires 9-30-96

Annual Statement

(Rev. January 1994) © Attach to Form 8609 and file with owner’s Federal income tax return.

Attachment Department of the Treasury

Internal Revenue Service © For Paperwork Reduction Act Notice, see instructions for Form 8609.

A Building owner’s name B Identifying number ©

C Building identification number © 

Credit information to enter on Form 8586 (See instructions.)

1 Eligible basis of building 1

2 Low-income portion (smaller of unit percentage or floor-space percentage) 2 .

3 Qualified basis of low-income building. Multiply line 1 by line 2. (See instructions.) 3

4 Part-year adjustment 4

5 Credit percentage 5 .

6 Multiply line 3 or line 4 by the percentage on line 5 6

7 Additions to qualified basis, if any 7

8 Part-year adjustment 8

9 9 .

10 Multiply line 7 or line 8 by the percentage on line 9 10

11 Section 42(f)(3)(B) modification 11

12 Add lines 10 and 11 12

13 Credit for building before line 14 reduction. Subtract line 12 from line 6 13

14 Disallowed credit due to Federal grants. (See instructions.) 14

15 Credit allowed for building for tax year. (See instructions.) 15

16 Taxpayer’s proportionate share of credit for the year. (See instructions.) 16

17

18

17 Pro rata reduction for the increased credit in prior year. (See instructions.) 

Taxpayer’s credit for tax years after the election year. Subtract line 17 from line 16. Enter here

and in Part I of Form 8586. (See instructions.)

Caution: If the qualified basis of the

building has decreased from the qualified

basis at the close of the previous tax year,

you may have to recapture part of the

credits taken in previous years. See section

42(j) and Form 8611, Recapture of

Low-Income Housing Credit.

General Instructions

Section 502(a) of the Tax Reform Act of

1986 provides transitional relief from the

passive loss rules for qualified investors in

a qualified low-income housing project.

However, if any person has been allowed

any benefit under section 502(a) for the

project, the low-income housing credit is

not allowed for the project.

Note: Do not attach Schedule A or Form

8609 to your return if the building is owned

by a partnership, S corporation, estate, or

trust (flow-through entity). That entity will

Except as noted below, if you are

claiming a credit for the tax year, Schedule

A and Form 8609 must be attached to

Form 8586, Low-Income Housing Credit,

and filed with your tax return.

Specific Instructions

Item B.—Enter your identifying number as

shown on your tax return.

Note: If the only credit you are claiming is

a credit you received from a flow-through

entity, Form 8586 is the only form

necessary to claim the credit. The

flow-through entity will complete an

additional Form 8586 and attach that form

with Schedule A and Form 8609 to its

return.

Item C.—Enter the building identification

number from Part I, item E, of Form 8609.

Purpose of Schedule A

Schedule A (Form 8609) must be

completed by the building owner each year

of the 15-year compliance period, whether

or not a credit is claimed for the tax year.

For a building receiving separate

allocations for the existing building and for

the rehabilitation expenditures, a separate

Schedule A must be completed for each

credit claimed. Except as noted below,

Schedule A is attached to the owner’s

copy of Form 8609 and both documents

must be attached to the owner’s Federal

income tax return.

Sequence No. 36a

Credit percentage. Enter one-third of the percentage on line 5 

Cat No. 10614Q

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Section references are to the Internal

Revenue Code unless otherwise noted.

For new buildings, the eligible basis is

generally the cost of construction or

rehabilitation expenditures incurred under

section 42(e).

For existing buildings, the eligible basis

is the cost of acquisition plus rehabilitation

expenditures not treated as a separate

new building under section 42(e) incurred

by the close of the first year of the credit

period.

Note: Generally, no credit is allowable for

acquisition of an existing building after

1989 unless substantial rehabilitation is

done. See sections 42(d)(2)(B)(iv) and

42(f)(5).

Residential rental property may qualify

for the credit even though part of the

building in which the residential units are

located is used for commercial use. To

figure the eligible basis of such property,

do not include the cost of the

nonresidential rental property. However,

you may generally include the basis of

common areas or tenant facilities, such as

swimming pools or parking areas, provided

there is no separate fee for the use of

these facilities and they are made available

on a comparable basis to all tenants in the

project. See section 42(d).

(Some of the line numbers on the January

1993 and January 1994 revisions of Form

8609 differ from earlier revisions of that

form (i.e., the March 1991 and December

1989 revisions). In these cases, the line

references that correspond to the earlier

revisions of Form 8609 are shown in

parentheses in these Schedule A

instructions.)

Schedule A (Form 8609) (Rev. 1-94)

Item To Note

The Revenue Reconciliation Act of 1993

(the 1993 Act) permanently extended the

low-income housing credit and made other

applicable changes reflected throughout

these instructions.

attach these documents to its return filed

for the tax year.

Line 1.—Generally, the eligible basis of a

building for its entire 15-year compliance

period is the amount of eligible basis

entered in Part II, line 7b (Part II, line 1b on

earlier revisions) of Form 8609. Determine

eligible basis at the close of the first year

of the credit period (see sections 42(f)(1),

42(f)(5), and 42(g)(3)(B)(iii) for determining

the start of the credit period). For housing

projects consisting of two or more

buildings, figure the eligible basis

separately for each building.
Schedule A (Form 8609) (Rev. 1-94) Page 3

1. The minimum set-aside requirement

elected for the project on Form 8609, Part

II, line 10c (Part II, line 5c, on earlier

revisions), is not met. IMPORTANT: For

buildings receiving a credit allocation after

1989, the minimum set-aside requirement

must be met by the close of the first year

of the credit period in order to claim any

credit for the first year or for any

subsequent years. Buildings that only

receive credit allocations before 1990 have

until the close of the tax year following the

tax year the building was placed in service

to meet this requirement.

Line 2.—Only the portion of the basis on

line 1 attributable to the low-income rental

units in the building at the close of the tax

year qualifies for the credit. This is the

smaller of (1) the percentage of

low-income units to all residential rental

units (the “unit percentage”), or (2) the

percentage of floor space of the

low-income units to the floor space of all

residential rental units (the “floor space

percentage”). This percentage must be

shown on line 2 as a decimal carried out to

four places (e.g., 50% = .5000).

Low-income units are units occupied by

qualifying tenants, while residential rental

units are all units, whether or not occupied.

2. The deep-rent-skewed test (15-40

Test) elected for the project on Form 8609,

Part II, line 10d (Part II, line 5d, on earlier

revisions), is violated. The 15-40 Test is not

an additional test for satisfying the

minimum set-aside requirements of section

42(g). The 15-40 Test is an election that

relates to the determination of a

low-income tenant’s income. If this test is

elected, at least 15% of all low-income

Generally, a unit is not treated as a lowincome unit unless it is suitable for

occupancy and is used other than on a

transient basis. Section 42(i)(3) provides for

certain exceptions (e.g., units that provide

transitional housing for the homeless may

3. You disposed of the building or your

entire interest therein during the tax year. If

you did not post a bond, in addition to

using an imputed basis of zero on line 3,

you may have to recapture a portion of

credits previously taken. File Form 8611 to

figure and report the recapture amount.

This paragraph affects only those

taxpayers who dispose of the building or

their entire interest therein. Those acquiring

the building (or any interest therein) are not

affected and, if the minimum set-aside

requirements are otherwise satisfied, they

may take a credit for the fraction of the

year the building is owned by them,

regardless of whether or not the seller

posts bond.

If you dispose of the building, or your

entire interest in the building (and you are

not a member of a flow-through entity)

before the close of the tax year, the lowincome portion must be determined on the

date you disposed of the building. If you

dispose of less than your entire interest in

the building, or if a member of a flowthrough entity disposes of any interest in

the building and the entity retains an

interest in the building, the low-income

portion must be determined at the close of

the tax year.

Modified percentage.—For the first year of

the credit period you must use a modified

percentage on line 2 to reflect the average

portion of a 12-month period that the units

in a building were occupied by low-income

individuals. Find the low-income portion as

of the end of each full month that the

building was in service during the year. Add

these percentages together and divide by

12. Enter the result on line 2. For example,

if a building was in service for the last 3 full

months of your tax year, and was half

occupied by low-income tenants as of the

end of each of those 3 months, then

assuming the smaller percentage was the

unit percentage, you would enter .1250 on

line 2 (i.e., [.5 1.5 1 .5] 4 12 = .1250).

Regulations under section 42(j) may

provide other instances where you will

have an imputed qualified basis of zero.

Note: If the qualified basis of the building

is zero, or if the building has an imputed

qualified basis of zero, you may not claim a

credit for the building for the tax year. You

must enter zero on lines 3 and 16, and

disregard lines 4 through 15 and lines 17

and 18.

At-risk limitation for individuals and

closely held corporations.—The basis of

property may be limited if you borrowed

against the property and are protected

against loss, or if you borrowed money

from a person who has other than a

creditor interest in the property. See

section 42(k).

This first year adjustment does not affect

the amount of qualified basis on which the

credit is claimed in the remaining 9 years

of the credit period. In general, the credit is

claimed in the remaining 9 years by

reference to the qualified basis at the close

of each tax year. Because the first year

credit is not determined solely by reference

to the qualified basis at the close of the

first year of the credit period, any reduction

in credit resulting from the application of

the first year adjustment may be claimed in

the 11th year.

Note: This increase cannot cause the

credit on line 15 of Schedule A to exceed

the credit amount allocated on line 1b, Part

I of Form 8609.

Basis reductions.—The amount of eligible

basis determined in Part II, line 7b of Form

8609 (Part II, line 1b, on earlier revisions)

does not include the cost of land, the

amount of any Federal grant received for

the building during the first year of the

credit period, or any portion of a building’s

adjusted basis for which an election was

made prior to November 5, 1990, under

section 167(k). Do not reduce the eligible

basis on line 1 of Schedule A by the

amounts of any Federal grants received

after the first year of the credit period. The

calculation in line 14 of Schedule A will

reduce the credit by the amount of any

Federal grants received during the

compliance period that did not reduce the

eligible basis during the first year of the

credit period.

Line 3.—This is the portion of the eligible

basis of the building attributable to the

low-income residential rental units.

Imputed basis of zero.—However, the

qualified basis of the building on line 3 is

zero if any of the following three conditions

apply.

Line 4.—If you dispose of a building or

your entire interest therein during the tax

year and you posted a bond under section

42(j)(6), you may claim a credit based on

the number of months during the tax year

for which you owned the building or an

interest therein. Similarly, if you previously

had no interest in the building, but you

acquired the building or an interest therein

during the tax year, you may claim a credit

based on the number of months during the

tax year for which you owned the building

or an interest therein. For further information on determining

eligible basis, see the instructions for Part

II, line 7b of Form 8609 (Part II, line 1b, on

earlier revisions) and section 42(d).

The owner who has owned the building

for the longest period during the month in

which the change in ownership occurs is

deemed to have owned the building for

that month. If the seller and new owner

have owned the building for the same

amount of time during the month of

disposition, the seller is deemed to have

owned the building for that month.

If the building is owned by a

flow-through entity, the entity does not

need to make any adjustment on line 4,

unless the entity either disposes of the

building or its entire interest therein, or

acquires the building or an interest therein

during the tax year (and the entity

previously had no interest in the building).

No adjustment needs to be made on line 4

for changes in the interests of the

members of the flow-through entity during

the tax year. Such changes will be

reflected in the amount of credit the

flow-through entity passes through to its

members.

The eligible basis in Part II, line 7b of

Form 8609 (Part II, line 1b, on earlier

revisions), should reflect the percentage

increase.

If the agency used an earlier revision of

Form 8609 (which did not have line 3b in

Part I) to issue a 1990 credit allocation to

which the high-cost-area provisions were

applied, it should have notified you of the

Part I percentage increase in a separate

statement. Based on this statement,

increase the eligible basis of the building

reported in Part II of the Form 8609 you

file.

The agency shows the increased

percentage of the eligible basis in Part I,

line 3b of Form 8609.

Basis increases for buildings placed in

service after December 31, 1989.—In

order to increase the allocated credit for

buildings in certain high-cost areas, the

housing credit agency may increase the

eligible basis of buildings located in these

areas (after adjustments, if any, for Federal

subsidies and grants). The agency may

make this increase under the high-costarea provisions of section 42(d)(5)(C).

qualify as low-income units). See section

42(i)(3) for more information.

units in the project must be occupied at all

times during the compliance period by

tenants whose income is 40% or less of

the area median gross income.
Schedule A (Form 8609) (Rev. 1-94) Page 4

Line 11.—Section 42(f)(3)(B) requires that

additions to qualified basis be adjusted to

reflect the average portion of the year that

the low-income units relating to the

increase were occupied. This adjustment is

required when there is an increase in the

qualified basis of the building from the

previous tax year. To determine this

adjustment amount, complete the

worksheet on page 6.

Line 14.—Section 42(d)(5)(A) requires the

eligible basis to be reduced by the amount

of any Federal grant made with respect to

the building or the operation thereof during

the compliance period. If the section

42(d)(5)(A) reduction does not apply, enter

zero on line 14. If the reduction applies,

you must calculate the line 14 reduction in

the credit due to the receipt of any Federal

grant for the building during the

compliance period (which did not already

reduce the amount of eligible basis

reported on line 1 of Schedule A) by

making the following calculations:

Line 8.—Similar to the instructions to line

4, if you disposed of a building or your

entire interest therein during the tax year

and you posted a bond under section

42(j)(6), your credit for the year is adjusted

to reflect the number of months during the

tax year that you owned the building or an

interest therein. Similarly, if you previously

had no interest in the building, but you

acquired the building or an interest therein

during the tax year, your credit for the year

is adjusted to reflect the number of months

during the tax year you owned the building

or an interest therein.

a. Divide the total amount of all Federal

grants received for the building during the

compliance period (which did not already

reduce the amount of the eligible basis

reported on line 1 of Schedule A) by the

eligible basis in line 1 of this Schedule A.

This result should be expressed as a

decimal carried out to four places.

If the building is owned by a

flow-through entity, the entity does not

need to make any adjustment on line 8,

unless the entity either (a) disposes of the

building or its entire interest therein or (b)

acquires the building or an interest therein

during the tax year (and the entity

previously had no interest in the building).

No adjustment needs to be made on line 8

for changes in the interests of the

members of the flow-through entity during

the tax year. Such changes will be

reflected in the amount of credit the

flow-through entity passes through to its

members.

Note: If you were allocated a 70% present

value credit percentage for a building that

was not federally subsidized and the

building later receives a Federal subsidy,

your credit percentage is reduced to the

30% present value credit that was in effect

during the month the building was placed

in service or for the month elected

pursuant to section 42(b)(2)(A)(ii), whichever

is applicable. The 30% present value credit

applies to the building for the year the

Federal subsidy was received and for the

remainder of the compliance period,

whether or not the Federal subsidy is

repaid. See section 42(i)(2).

Line 9.—The credit for additions to the

building’s qualified basis is determined

using two-thirds of the credit percentage

allowable for the building’s original

qualified basis. Therefore, one-third of the

credit percentage (expressed as a decimal)

on line 5 is not allowed. Enter on line 9

one-third of the amount shown on line 5.

This amount must be reported on line 9 as

a decimal carried out to four places (e.g., if

the credit percentage entered on line 5 is

.0912, one-third of that percentage would

be expressed as .0304). See section

42(f)(3).

Line 6.—If you owned the building, or had

an interest therein, for the entire tax year,

multiply line 3 by line 5 and enter the

result. If you had no ownership interest in

the building for a portion of the tax year,

multiply line 4 by line 5 and enter the

result.

Line 7.—An addition to qualified basis

results when there is an increase in the

number of low-income units or an increase

in the floor space of the low-income units

over that which existed at the close of the

first year of the credit period (without

application of the modified percentage

calculation). You may claim a credit for an

addition to qualified basis only if credit

amounts have been allocated by the

housing credit agency to cover these

additions. Credits for an addition to

qualified basis may be claimed at the

reduced credit percentage of two-thirds of

Line 10.—If you owned the building, or

had an interest therein, for the entire tax

year, multiply line 7 by line 9 and enter the

result. If you had no ownership interest in

the building for a portion of the tax year,

multiply line 8 by line 9 and enter the

result.

If you owned the building, or an interest

therein, for the entire tax year, enter zero

on line 8 and go to line 9. If you had no

ownership interest in the building for a

portion of the tax year, multiply the

additions to qualified basis on line 7 by a

fraction, the numerator of which is the

number of months during the tax year you

owned the building and the denominator of

which is 12. Enter the result on line 8.

Note: If the eligible basis on line 1 of this

Schedule A was increased by a percentage

allowable under section 42(d)(5)(C) (and

reflected either in Part I, line 3b of Form

8609 or in a separate statement issued to

you by the housing credit agency), then

increase the total amount of all Federal

grants in a by this percentage increase and

divide this amount by the eligible basis in

line 1 of this Schedule A. For example, if

the percentage increase is 130% and all

Federal grants total $11,000, multiply

$11,000 by 1.30 and divide the result

($14,300) by the eligible basis on line 1.

b. Multiply the decimal amount

determined in a by the credit on line 13.

Enter this result on line 14.

Line 15.—Enter the lesser of (a) the total

amount allocated by the housing credit

agency to the building as shown in Part I,

line 1b, of Form 8609, or (b) the result of

line 13 minus line 14.

Note: The line 15 amount is the credit

allowed for the building. It has already

been adjusted by lines 4 and 8 of Schedule

A to take into account the number of

months the taxpayer owned the building for

the tax year.

If you are not claiming a credit for

additions to qualified basis on line 7, enter

zero on lines 7 through 12 and go to line

13.

Lines 7 Through 12

Note: Upon a change of ownership, the

seller must give the new owner a copy of

Form 8609 with Parts I and II completed

and the signature line blank. The buyer and

seller must retain copies of Form 8609 for

recordkeeping purposes. The new owner

must follow the instructions in Schedule A

and the instructions for Form 8609 in order

to claim any credits.

Line 5.—If the agency has made an

allocation on Form 8609, enter on line 5

the credit percentage shown on Form

8609, Part I, line 2. This percentage must

be shown on line 5 as a decimal carried

out to four places (e.g., 9.12% would be

shown on line 5 as .0912).

If none of the circumstances described

in the line 4 instructions apply to you, enter

zero on line 4.

Line 16.—The Revenue Reconciliation Act

of 1990 provided “qualifying” taxpayers a

one-time election to accelerate their credit

in the first tax year ending on or after

October 25, 1990. If the taxpayer did not

elect the accelerated credit for the first tax

year ending on or after October 25, 1990,

enter the taxpayer’s proportionate share

(see below) of the line 15 credit on lines 16

and 18 and enter zero on line 17.

If you owned the building, or an interest

therein, for the entire year (i.e., the full 12

months comprising your tax year), enter

zero on line 4 and go to line 5. If, for a

portion of the tax year, you had no

ownership interest in the building, multiply

the qualified basis on line 3 by a fraction,

the numerator of which is the number of

months during the tax year that you owned

the building and the denominator of which

is 12 (e.g., if line 3 is $100,000 and the

building was owned for 9 months, then line

4 would be $75,000 (9/12 3 $100,000)).

Enter the result on line 4.

the credit percentage (expressed as a

decimal) on line 5 through the end of the

compliance period.

If you are claiming a credit for additions

to qualified basis, you must subtract the

original qualified basis of the building at

the close of the first year of the credit

period (see Form 8609, Part II, line 8a (Part

II, line 2a, on earlier revisions)) from the

building’s qualified basis entered on line 3

of Schedule A. Enter the result on line 7. If

the result is zero or less, enter zero on

lines 7 through 12 and enter the credit

from line 6 on line 13.
Schedule A (Form 8609) (Rev. 1-94) Page 5

If a taxpayer posts a bond upon the

disposition of the building or upon a

disposition of the taxpayer’s entire interest

in the building (and the taxpayer is not a

member of a flow-through entity), the

taxpayer’s line 16 credit amount is

determined by multiplying the line 15 credit

amount by the percentage interest in the

building disposed of by the taxpayer. For

example, if a building is owned by

individuals A and B (60% by A and 40%

by B) and at the close of the fifth month of

the tax year, C buys A’s 60% interest in

the building and A posts a bond, then A

would enter 60% of line 15 on line 16.

(Lines 4 and 8 have already taken into

account the 5 months of the tax year that

A held an interest in the building.)

De minimis recapture rule.—For

administrative purposes, the Service

intends to issue regulations adopting a de

minimis rule that applies to partners in

partnerships (other than partnerships

described in section 42(j)(5)(B)) owning

interests in qualified low-income buildings.

The rule allows a partner to elect to avoid

or defer recapture resulting from a

disposition of interest in a partnership

without posting bond until the partner has

disposed of more than 331⁄3% of the

partner’s greatest total interest in the

qualified low-income building through the

partnership. See Rev. Rul. 90-60, 1990-2

C.B. 3, for more information on the de

minimis rule.

Line 17.—If you elected the accelerated

credit for your first tax year ending on or

after October 25, 1990 (i.e., the election

described in the instructions for line 16),

you must decrease each subsequent

year’s allowable credit for property for

which the increased credit was claimed by

the subsequent year’s ratable share of the

increased credit. To find the ratable

reduction share, divide the amount on line

17 of the January 1991 revision of

Schedule A by the number of allowable

credit years after the election year. This

pro rata reduction amount will be the same

for each credit year after the election year.

Enter this amount on line 17. For example,

assume a taxpayer elected to claim an

accelerated credit of $70 for the 1990 tax

year. If the property is eligible for 7 years

of credit after the election year, the

allowable credit in each of the subsequent

7 years is reduced by $10 ($70 divided by

7). In this example, the taxpayer (or its

successor) would report $10 on line 17 of

Schedule A (Form 8609) for each tax year

after the election year.

If the taxpayer posts a bond upon the

disposition of the building or an interest

therein, the taxpayer is allowed credit for

the year both with respect to the

ownership interest disposed of by the

taxpayer and the interest retained by the

taxpayer. For example, again assume that

a taxpayer owns 100% of a building for 9

months of the tax year and 40% of the

building for the last 3 months of the tax

year. After posting a bond, the taxpayer’s

credit on line 16 would be based upon 9⁄12

of 100% (or 75%) of the line 15 credit for

the building plus 3⁄12 of 40% (or 10%) of

the line 15 credit amount.

Line 18.—If you are a qualifying

partnership or S corporation that elected

the accelerated credit for the first tax year

ending on or after October 25, 1990, enter

the line 18 amount in Part I of Form 8586

and separately allocate the line 18 amount

to partners and shareholders as follows:

a. The regular 100% credit portion is

allocated to nonqualifying partners.

b. The reduced credit portion (i.e., 100%

credit less the line 17 ratable reduction

amount) is allocated to qualifying partners

and all shareholders (see Note below

regarding treatment of the reduced credit

for nonqualifying shareholders).

Note: Although the increased credit was

figured for all shareholders of a qualifying S

corporation, shareholders who were

nonqualifying shareholders were not

permitted to claim on their tax returns their

share of the increased credit. Instead, each

nonqualifying shareholder’s share of the

increased credit is maintained in a

suspense account and only the regular

100% credit is distributed to the

nonqualifying shareholders on

Schedule K-1 (Form 1120S).

In tax years after the election year, the

suspended credit is used to offset the

nonqualifying shareholder’s share of the

ratable reduction in the credit (line 17 of

Schedule A). See Section 7 of Rev. Proc.

91-7, 1991-1 C.B. 416.

Note: The aggregate credit claimed by the

owners of the building cannot exceed the

line 15 credit amount for the building.

c. If a flow-through entity is completing

Schedule A as the sole owner of the

building, enter the line 15 credit (after

adjustment for any applicable special rule

below) on line 16.

Special rules.—If a taxpayer is subject to

recapture because of failure to post a

bond upon the disposition of a building or

interest therein (see De minimis recapture

rule below), no credit is allowed to the

taxpayer for that percentage of the interest

disposed of by the taxpayer. The credit

allowed to the taxpayer for the tax year is

determined by reference to the taxpayer’s

remaining interest in the building at the

close of the tax year. For example, assume

that a taxpayer owns 100% of a building

for 9 months of the tax year and 40% of

the building for the last 3 months of the

tax year. (The taxpayer disposed of a 60%

interest at the close of the ninth month.) If

the taxpayer does not post a bond, the

taxpayer’s credit on line 16 would be

based on 40% of the line 15 credit for the

building. Similarly, although a taxpayer

a. If the building is owned completely by

one taxpayer, enter the line 15 credit (after

adjustment for any applicable special rule

below) on line 16.

b. If the building is owned by more than

one taxpayer, and those taxpayers are not

members of a flow-through entity, then the

line 15 credit (after adjustment for any

applicable special rule below) must be

distributed according to each taxpayer’s

respective ownership interest in the

building. For example, if a building is

owned by individuals A and B (60% by A

and 40% by B), each would complete a

separate Schedule A as follows. Lines 1

through 15 would be the same for each,

assuming no part-year adjustments are

necessary. However, A would enter 60% of

line 15 on line 16, and B would enter 40%

of line 15 on line 16. Therefore, enter on

line 16 your share of the line 15 credit for

the building that relates to your interest in

the building. If your interest increases or

decreases during the tax year, the change

must be taken into account in determining

your share of the line 15 credit.

Determining the taxpayer’s proportionate

share of line 15 credit.—To determine the

amount to enter on line 16, you must take

into account the applicable rules listed in

paragraphs a, b, c, and the Special rules

below.

If the taxpayer elected the accelerated

credit, enter the taxpayer’s proportionate

share (see below) of the line 15 credit on

line 16 and complete lines 17 and 18.

The 1993 Act revised section 42(g) to

allow the Secretary of the Treasury, upon

application by the building owner, to waive

any recapture of the low-income housing

credit in the case of any de minimis error

in complying with the minimum set-aside

requirements.

might not be subject to recapture upon a

disposition of a de minimis portion

(explained below) of the taxpayer’s interest

in the building, no credit is allowed to the

taxpayer for the percentage of the interest

disposed of by the taxpayer. The credit

allowed to the taxpayer for the tax year is

determined by reference to the taxpayer’s

remaining interest in the building at the

close of the tax year.
Schedule A (Form 8609) (Rev. 1-94) Page 6

Line 11 WORKSHEET (Keep for your records.)

Enter the qualified basis of the building from line 3 of the previous tax year’s Schedule A 1

Note: If the amount entered on line 1 is greater than zero, skip line 2 and go to line 3.

If the amount entered on line 1 was zero as a result of an imputed qualified basis of zero due to,

for example: (a) violation of the minimum set-aside requirement or (b) violation of the

deep-rent-skewed test, enter what would otherwise have been the qualified basis of the building

(i.e., the amount that would have been entered for the building on line 3 of the previous tax year’s

Schedule A). This amount may be determined by multiplying the amount on line 1 of the previous

year’s Schedule A by the amount on line 2 of the previous year’s Schedule A 2

Increased qualified basis. Subtract the greater of the amount entered on line 1 or line 2 of this

worksheet from the qualified basis entered on line 3 of this Schedule A. (If the amount entered on

line 1 or line 2 of this worksheet is greater than zero but less than the original qualified basis of the

building entered on Form 8609, Part II, line 8a (Part II, line 2a, on earlier revisions), then enter on

line 3 of this worksheet the amount entered on line 7 of this Schedule A.) 3

Note: If the amount entered on line 3 of this worksheet is less than or equal to zero, do not

complete the worksheet. Instead, enter zero on line 11 of Schedule A and go to line 12.

Modified percentage. This is similar to the Modified percentage instructions for line 2, Schedule

A. For each month during the tax year in which there was an increase in the low-income portion

of the building, take the low-income portion of the building and subtract the low-income portion

of the building at the close of the previous tax year (the amount on line 2 of the previous tax

year’s Schedule A). For example, if the previous tax year’s low-income portion of .5000 increased

to .7500 for the months of October, November, and December of this tax year, then subtract

.5000 from .7500 to get an increase of .2500 for each month of October through December. Add

these amounts together, divide by 12, and enter this amount. (This amount must be shown as

a decimal carried out to four places (e.g., .2500 1 .2500 1 .2500 = .7500, divided by 12 =

.0625.)) 4

Increased qualified basis entitled to reduced credit. Multiply line 1 of Schedule A by line 4 of

this worksheet 5

Increased qualified basis not entitled to reduced credit. Subtract line 5 above from line 3 above 6

Schedule A, line 11 modification. Multiply the amount on line 6 of this worksheet by two-thirds

of the amount on line 5 of this Schedule A. Enter this amount on line 11 of this Schedule A 7

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