Cat. No. 63987I

OMB No. 1545-0984

Form 8586 Low-Income Housing Credit

Department of the Treasury

Internal Revenue Service

Attachment

Sequence No. 36a © Attach to your tax return.

Name(s) shown on return Identifying number

Number of Forms 8609-A attached for buildings placed in service before

January 1, 2008 ©

1

2

3

3

Has there been a decrease in the qualified basis of any buildings accounted for on line 1 since 

the close of the preceding tax year? Yes No If “Yes,” enter the building

identification numbers (BINs) of the buildings that had a decreased basis. If you need more

space, attach a schedule.

(i) (ii) (iii) (iv)

Current year credit from attached Form(s) 8609-A for buildings placed in service before

January 1, 2008 (see instructions) 

4

5

4

6

5

Form 8586 (2008)

7

6

For Paperwork Reduction Act Notice, see instructions.

(99)

Part I low-income housing credit for buildings placed in service before January 1, 2008, from

partnerships, S corporations, estates, and trusts 

Add lines 3 and 4. Estates and trusts, go to line 6; partnerships and S corporations, report this

amount on Schedule K; all others, report this amount on Form 3800, line 1d 

Amount allocated to beneficiaries of the estate or trust (see instructions) 

Estates and trusts. Subtract line 6 from line 5. Report this amount on Form 3800, line 1d 7

2008

Part I

Part II

Buildings Placed in Service Before January 1, 2008

Buildings Placed in Service After December 31, 2007

8 Number of Forms 8609-A attached for buildings placed in service after

December 31, 2007 ©

9 Has there been a decrease in the qualified basis of any buildings accounted for on line 8 since 

the close of the preceding tax year? Yes No If “Yes,” enter the building

identification numbers (BINs) of the buildings that had a decreased basis. If you need more

space, attach a schedule.

(i) (ii) (iii) (iv)

Current year credit from attached Form(s) 8609-A for buildings placed in service after

December 31, 2007 (see instructions) 

10

Part II low-income housing credit for buildings placed in service after December 31, 2007, from

partnerships, S corporations, estates, and trusts 

11

Add lines 10 and 11. Partnerships and S corporations, report this amount on Schedule K; all

others, continue to line 13 

12

Low-income housing credit included on line 12 from passive activities (see instructions)

Subtract line 13 from line 12

Low-income housing credit allowed for 2008 from a passive activity (see instructions)

13

14

15

16 Carryforward of low-income housing credit for 2007 fiscal-year filers (see instructions) 

17 Carryback of low-income housing credit from 2009 (see instructions) 

18 Add lines 14 through 17. Estates and trusts, go to line 19; all others, report this amount on 

Form 3800, line 29d 

Amount allocated to beneficiaries of the estate or trust (see instructions) 

Estates and trusts. Subtract line 19 from line 18. Report this amount on Form 3800, line 29d

19

20

10

11

12

13

14

15

16

17

18

19

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Form 8586 (2008) Page 2

Specific Instructions

Line 2. A decrease in qualified basis will result in recapture if the

qualified basis at the close of the tax year is less than the qualified

basis at the close of the first year of the credit period.

Line 3. The credit for the year is figured on Form 8609-A for each

building. Attach a copy of each Form 8609-A you completed for the

tax year to Form 8586. Enter on line 3 the total credit from attached

Form(s) 8609-A for buildings placed in service before 2008.

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. See the instructions for the tax return with

which this form is filed.

If the reduction in qualified basis at the close of the tax year also

results in a violation of the minimum set-aside requirement, then no

credit is allowable for the year.

Paperwork Reduction Act Notice. 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.

The time needed to complete and file this form will vary

depending on individual circumstances. The estimated burden for

individual taxpayers filing this form is approved under OMB control

number 1545-0074 and is included in the estimates shown in the

instructions for their individual income tax return. The estimated

burden for all other taxpayers who file this form is: Recordkeeping,

5 hr., 44 min.; Learning about the law or the form, 52 min.;

Preparing the form, 1 hr., 55 min.; Copying, assembling, and

sending the form to the IRS, 16 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.

Line 6. Allocate the amount on line 5 between the estate or trust and

the beneficiaries in the same proportion as income was allocated

and enter the beneficiaries’ share on line 6.

Qualified Low-Income Housing Project

Except for buildings financed with certain tax-exempt bonds, you

may not take a low-income housing credit on a building if it has not

received an allocation from the housing credit agency. No allocation

is needed when 50% or more of the aggregate basis of the building

and the land on which the building is located is financed with certain

tax-exempt bonds issued after 1989 for buildings placed in service

after 1989. The owner still must get a Form 8609 from the

appropriate housing credit agency (with the applicable items

completed, including an assigned BIN). “Land on which the building

is located” includes only land that is functionally related and

subordinate to the qualified low-income building (see Regulations

sections 1.103-8(a)(3) and 1.103-8(b)(4)(iii)).

Recapture of Credit

The low-income housing credit can only be claimed for residential

rental buildings in low-income housing projects that meet one of the

minimum set-aside tests. For details, see the instructions for Form

8609, Part II, line 10c.

There is a 15-year compliance period during which the residential

rental building must continue to meet certain requirements. If, as of

the close of any tax year in this period, there is a reduction in the

qualified basis of the building from the previous year, you may have

to recapture a part of the credit you have taken. Similarly, you may

have to recapture part of the credits taken in previous years upon

certain dispositions of the building or interests therein, unless you

follow the procedures to prevent recapture. See Recapture and

building dispositions in the Instructions for Form 8609-A, Annual

Statement for Low-Income Housing Credit, for details. If you must

recapture credits, use Form 8611, Recapture of Low-Income

Housing Credit. See section 42(j) for details.

Section references are to the Internal Revenue Code unless

otherwise noted.

General Instructions

What’s New

Purpose of Form

Use Form 8586 to claim the low-income housing credit. This general

business credit is allowed for each new qualified low-income building

placed in service after 1986. Generally, it is taken over a 10-year

credit period.

Recordkeeping

Keep a copy of this Form 8586 together with all Forms 8609,

Schedules A (Form 8609) (and successor Forms 8609-A), and Forms

8611 for 3 years after the 15-year compliance period ends.

The credit cannot exceed the amount allocated to the building. See

section 42(h)(1) for details.

The portion of the low-income housing credit attributable to buildings

placed in service after 2007 is not limited by tentative minimum tax

and cannot be reported on page 1 of Form 3800. Part II was added

to the form to figure this portion of the credit. Report any

carryforward of the credit from 2007 to 2008 on Form 3800, line 6.

Report any carryback of the credit from 2008 to 2007 on the 2007

Form 6478, Credit for Alcohol Used as Fuel, line 10, and enter

“LIHC” to the left of the entry space.

In certain situations, it is possible to prevent the recapture of

credits taken in previous years upon certain dispositions of the

building or your interest therein. See Recapture of Credit below.

Taxpayers that are not partnerships, S corporations, estates, or

trusts, and whose only source of this credit is from buildings placed

in service before 2008 from those pass-through entities, are not

required to complete or file this form. Instead, they can report this

credit directly on line 1d of Form 3800.

Line 9. A decrease in qualified basis will result in recapture if the

qualified basis at the close of the tax year is less than the qualified

basis at the close of the first year of the credit period.

If the reduction in qualified basis at the close of the tax year also

results in a violation of the minimum set-aside requirement, then no

credit is allowable for the year.

Line 10. The credit for the year is figured on Form 8609-A for each

building. Attach a copy of each Form 8609-A you completed for the

tax year to Form 8586. Enter on line 10 the total credit for attached

Form(s) 8609-A for buildings placed in service after 2007.

Line 13. Enter the amount included on line 12 that is from a passive

activity. Generally, a passive activity is a trade or business in which

you did not materially participate. Rental activities are generally

considered passive activities, whether or not you materially

participate. For details, see Form 8582-CR, Passive Activity Credit

Limitations (for individuals, estates, and trusts), or Form 8810,

Corporate Passive Activity Loss and Credit Limitations (for

corporations).

Line 15. Enter the passive activity low-income housing credit

allowed for 2008 from Form 8582-CR or Form 8810.

Line 16. Enter any carryforward of the credit from 2007 to 2008

attributable to buildings placed in service after 2007. Enter any

carryforward of the credit from 2007 to 2008 attributable to buildings

placed in service before 2008 on Form 3800, line 6.

Line 17. Enter any carryback if you amend your 2008 return to carry

back an unused low-income housing credit from 2009. Report any

carryback of the credit from 2008 to 2007 on the 2007 Form 6478,

Credit for Alcohol Used as Fuel, line 10, and enter “LIHC” to the left

of the entry space.

Line 19. Allocate the amount on line 18 between the estate or trust

and the beneficiaries in the same proportion as income was

allocated and enter the beneficiaries’ share on line 19.