8586 OMB No. 1545-0984

Low-Income Housing Credit Form

Department of the Treasury 

Internal Revenue Service Attach to your return. Attachment

Sequence No. 43

Name(s) as shown on return Taxpayer Identification number

Part I Current Year Low-income Housing Credit (See Instructions.)

Number of Forms 8609 attached

Eligible basis of building(s) (total from attached Schedule(s) A (Form 8609), line 1) 2

Qualified basis of low-income building(s) (total from attached Schedule(s)A (Form 8609), line 3) 3a

Has there been a decrease in the qualified basis of any building(s) since the close of the preceding tax

year? Yes No If “Yes,” enter the building identification number (BIN) of the building(s) that had

a decreased basis. If more space is needed, attach a schedule to list the BINs.

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

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4 Credit for the year (total from attached Schedule(s) A (Form 8609) (see instructions))

It you are a— Then enter total of current year housing credit(s) from—

5 Housing credits from 

 flowthrough entities

ScheduleK-1 (Form 1120S), lines 12b(1) through (4) 

ScheduleK-1 (Form 1065), lines 13b(1) through (4)

a Shareholder

b Partner

c Beneficiary Schedule K-1 (Form 1041), line 12 

d Patron Written statement from cooperative

6 Current year credit—Add lines 4 and 5

See General Instruction B, Who Must File Form 3800, General Business Credit.

Part II Tax Liability Limitations

Individuals—Enter amount from Form 1040, line 40

Corporations—Enter amount from Form 1120, Schedule J, line 3 (or Form 1120-A, Part 1, line 1) 7

Other filers—Enter regular tax before credits from your return

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Credits that reduce regular tax before the low-income housing credit: 

Credit for child and dependent care expenses (Form 2441)

Credit for the elderly or the disabled (Schedule R, Form 1040) 

Foreign tax credit (Form 1116 or Form 1118)

Possessions tax credit (Form 5735)

Mortgage interest credit (Form 8396) 

Credit for fuel from a nonconventional source

Orphan drug credit (Form 6765)

Total credits that reduce regular tax before the low-income housing credit (add lines 8a through 8g) 8h

Net regular tax—Subtract line 8h from line 7

10 Tentative minimum tax:

a Individuals—Enter amount from Form 6251, line 17 

b Corporations—Enter amount from Form 4626, line 13 

c Estates and Trusts—Enter amount from Form 8656, line 37

11 Net income tax: 

a Individuals—Add line 9 above, and line 19 of Form 6251. Enter the total 

b Corporations—Add line 9 above, and line 15 of Form 4626. Enter the total 

c Other filers—See instruction for line 11c

12 If line 9 is more than $25,000, enter 25% of excess (see instructions)

13 Subtract line 10 or Iine 12, whichever is greater, from line 11. Enter the result. (If less than zero, enter -0-.)

Changes You Should Note.—Section 

11407(c) of the Revenue Reconciliation Act 

of 1990 provides that certain taxpayers may 

elect to increase their low-income housing 

credit by 50%. The election can be made 

only by eligible persons by completing lines 

17 and 18 on Schedule A (Form 8609), 

revised January 1991. See the instructions 

for Schedule A for a definition of eligible 

persons and other details.

Paperwork Reduction Act Notlce,—We ask 

for the information on this form to carry out 1 hr., 50 min.

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.

Preparing and sending 

the form to IRS 4 hrs., 24 min.

If you have comments concerning the 

accuracy of these time estimates or 

suggestions for making this form more 

simple, we would be happy to hear from you. 

You can write to both the IRS and the Office 

of Management and Budget at the addresses 

listed in the instructions of the tax return with 

which this form is filed.

The time needed to complete and file this 

form will vary depending on individual 

circumstances. The estimated average time is:

Recordkeeping 5 hrs., 16 min.

Form 8586 (1990)

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Low-income housing credit allowed for current year. Enter the smaller of line 6 or line 13. This is your 

General Business Credit for 1990. Enter here and on Form 1040, line 44: Form 1120, Schedule J, line

4e; Form 1120-A, Part I, line 2a; or the appropriate line of other income tax returns

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Page 2 Form 85S6 (1990)

General Instructions Instead, they must use either the 20-50 test in 

(1) above, or a 25-60 test: 25% or more of the 

residential units in the project must be both 

rent restricted and occupied by individuals 

whose income is 60% or less of the area 

median gross income (see section 142(d)(6)).

(Section references are to the Internal 

Revenue Code unless otherwise noted.)

A. Purpose of Form.—Owners of residential 

rental buildings providing low-income 

housing use Form 8586 to claim the 

low-income housing credit.

B. Who Must File Form 3800, General 

Business Credit.— The general business 

credit consists of the investment credit, jobs 

credit, credit for alcohol used as fuel, 

research credit, low-income housing credit, 

and disabled access credit. If you have: (1) 

more than one of these credits for 1990; (2) 

a carryback or carryforward of any of these 

credits; or (3) a low-income housing credit 

from a passive activity, attach the 

appropriate credit forms and summarize 

them on Form 3800, General Business 

Credit. If you have only a 1990 low-income 

housing credit and the credit is not from a 

passive activity, you do not have to file 

Form 3800 this year.

You must obtain a Form 8609 (with

Part I completed) from the state or local credit 

agency for each building for which you are 

claiming a credit. A copy of Form 8609 and 

accompanying Schedule A (Form 8609) for 

each building must be attached to your return 

for each year of the 15-year compliance 

period. You must also certify certain first-year 

information to the IRS on Form 8609. If this 

certification is not made, you may not claim a 

credit for that building.

However, you do not need to attach Form 

8609 or Schedule A (Form 8609) to Form 

8586 if the only credit claimed on Form 8586 

is a credit from a flow-through entity. See the 

‘Note’ at beginning of Specific Instructions 

below for details.

C. Partnerships, S Corporations, Estates 

and Trusts.—Complete Part I to figure the 

credit to pass through to the partners, 

shareholders, or beneficiaries. Attach Form 

8586 to the entity's income tax return along 

with a Form 8609, Low-Income Housing 

Credit Allocation Certification, and Schedule 

A (Form 8609), Annual Statement, for each 

building.

You may not take a low-income housing 

credit on a building if it has not received an 

allocation. Generally, the allocation must be 

received in the calendar year the building is 

placed in service. In addition, no credit will be 

allowed in excess of the amount allocated to 

the building by the housing credit agency. See 

section 42(h)(1) for details. An allocation is not 

needed when: (1) 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; or (2) 

70% or more of the aggregate building and 

land is financed with certain tax-exempt bonds 

issued before 1990.

Caution: No credit may be claimed on any 

building for which there has been allowed any 

relief from the passive loss rules under 

section 502 of the Tax Reform Act of 1986.

Introduction

Recapture of credit. 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 of the 

qualified basis in any 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. 

Use Form 8611, Recapture of Low-Income 

Housing Credit, See section 42(j).

(1) 20-50 Test: 20% or more of the 

residential units in the project must be both 

rent restricted and occupied by individuals 

whose income is 50% or less of the area 

median gross income, or

Line 12. Llmitation.—See section 38(c)(3) for 

special rules for married couples filing 

separate returns, for controlled corporate 

groups, and for estates and trusts. 

(2) 40-60 Test: 40% or more of the 

residential units in the project must be both 

rent restricted and occupied by individuals 

whose income is 60% or less of the area 

median gross income.

Note: Owners of buildings in projects 

located in New York City may not use the 

40-60 test.

The low-income housing credit determined 

under section 42 is a credit of 70% of the 

qualified basis of each new low-income 

building placed in service after 1986 (30% in 

the case of certain Federally subsidized new 

buildings or existing buildings). This credit is 

taken over a 10-year period so that the present 

value of the 10 annual credit amounts 

determined as of the last day of the first year 

of the credit period equals 70% (or 30%) of the 

building's qualified basis.

In general, the 10-year credit period starts 

at the beginning of the tax year in which the 

building is placed in service. However you 

may elect to begin the 10-year credit period 

in the tax year after the year the building was 

placed in service by checking the “Yes” box 

in Part II, Iine 5a, of Form 8609.

Qualified Low-Income Housing Project.— The low-income housing credit can only be 

claimed for residential rental buildings in lowincome housing projects that meet one of the

following tests:

You may elect either test for the project, but 

once made, the election is irrevocable. The test 

elected must be the same for all buildings in 

the project. Use Form 8609 to make this 

election. See Section 42(g) for more details.

However, you must still get a Form 8609 

from the applicable housing credit agency (with 

Part I completed, including an assigned 

building's identification number) and you must 

still complete the appropriate parts of Form 

8609 and attach it to your return.

“Land on which the building is located” 

includes only land that is functionally related 

and subordinate to the qualified low-income 

building (see Regulations section 1.103- 

8(b)(iii) for the meaning of “functionally 

related and subordinate”).

Recordkeeping Requirements.—You should 

keep a copy of this Form 8586 together with

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

and Form 8611 for 3 years after the 15-year

compliance period ends.

Specific Instructions 

Note: If the only credit claimed on Form 8586 is 

a credit you received from a flow-through entity 

(i.e,. partnership, S corporation, estate, or 

trust), do not complete lines 1 through 4 or

attach Forms 8609. Complete only lines 5 and

6 of Part I and the applicable lines of Part II, or 

Form 3800.

Line 1.—If any of the attached Forms 8609

are for buildings that are part of a multiple 

building project (defined in instructions for Part 

II, item 2b of Form 8609), attach a schedule 

listing the following information for each 

project: (1) name and address of the project 

and each building in the project., (2) the 

building identification number (BIN) of each 

building in the project, (3) the aggregate credit 

dollar amount for the project, and (4) the credit 

allocated to each building in the project.

Line 3b.—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.

Important: 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. If you must recapture credits, use 

Form 8611. See section 42(j) for additional

information.

Line 4.—The line 4 credit for the year is 

figured on Schedule A (Form 8609) for each 

building. Copies of Form(s) 8609 and 

Schedule(s) A (Form 8609) must be attached 

to Form 8586 for each tax year a credit is 

claimed. Enter on line 4 the credit from line 16, 

18, or 20, whichever is applicable, of Schedule 

A (Form 8609) (Rev. 1-91). If more than one 

Form 8609 and related Schedules A are 

attached, enter on line 4 the total credit

from all attached Schedules A.

If Form 8586 is completed by a flow- through 

entity and the line 4 credit is attributable to 

more than one building, the entity must attach a 

schedule to Form 8586 that shows each 

partner's, shareholder's, or beneficiary's name, 

taxpayer identification number, and share of the 

line 4 credit for each building and the BIN of 

each building.

Line 5.—If you have credits from a flowthrough entity, or a cooperative under section 

521, total the credits from the appropriate forms 

and schedules and enter the total on line 5.

Line 6.—If any part of the credit on line 6 is 

from a passive activity, stop here and go to

Form 3800.

Line 11c. Other filers.—Enter the sum of line 9 

and your alternative minimum tax, if any, from 

whichever alternative minimum tax form

you file.

Carrybacks and carryforwards.—If you 

cannot use part or all of the credit because of 

the tax liability limitations, you may carry the 

excess to other years. Use Form 3800.

U.S. GPO 1991-265-398

See section 383 for the limitation on the 

amount of any excess general business tax 

credits of a loss corporation for any tax year 

ending after a post-1986 ownership change 

that may be used in a post-change year.