Form 8586 

(Rev. August 2014)

Department of the Treasury 

Internal Revenue Service (99)

Low-Income Housing Credit

▶ Attach to your tax return.

▶ Information about Form 8586 is available at www.irs.gov/form8586.

OMB No. 1545-0984

Attachment 

Sequence No. 36a

Name(s) shown on return Identifying number

Part I Buildings Placed in Service Before 2008

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

2008 . . . . . . . . . . . . . . . . . . . . . . ▶

2 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)

3 Current year credit from attached Form(s) 8609-A for buildings placed in service before 2008 

(see instructions) . . . . . . . . . . . . . . . . . . . . . . . . . . 3

4 Low-income housing credit for buildings placed in service before 2008 from partnerships, S 

corporations, estates, and trusts . . . . . . . . . . . . . . . . . . . . . 4

5 Add lines 3 and 4. Estates and trusts, go to line 6. Partnerships and S corporations, stop here 

and report this amount on Schedule K. All others, stop here and report this amount on Form

3800, Part III, line 1d, column (c) . . . . . . . . . . . . . . . . . . . . . 5

6 Amount allocated to beneficiaries of the estate or trust (see instructions) . . . . . . . . 6

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

column (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

Part II Buildings Placed in Service After 2007

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

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)

10 Current year credit from attached Form(s) 8609-A for buildings placed in service after 2007 

(see instructions) . . . . . . . . . . . . . . . . . . . . . . . . . . 10

11 Low-income housing credit for buildings placed in service after 2007 from partnerships, 

S corporations, estates, and trusts. . . . . . . . . . . . . . . . . . . . . 11

12 Add lines 10 and 11. Estates and trusts, go to line 13. Partnerships and S corporations, stop

here and report this amount on Schedule K. All others, stop here and report this amount on

Form 3800, Part III, line 4d, column (c) . . . . . . . . . . . . . . . . . . . 12

13 Amount allocated to beneficiaries of the estate or trust (see instructions) . . . . . . . . 13

14 Estates and trusts, subtract line 13 from line 12. Report this amount on Form 3800, Part III, line

4d, column (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

For Paperwork Reduction Act Notice, see General Instructions. Cat. No. 63987I Form 8586 (Rev. 8-2014)
Form 8586 (Rev. 8-2014) Page 2 

General Instructions

Section references are to the Internal Revenue Code unless 

otherwise noted.

Future developments. The IRS has created a page on IRS.gov for 

information about Form 8586 and its instructions, at www.irs.gov/

form8586. Information about any future developments affecting 

Form 8586 (such as legislation enacted after we release it) will be 

posted on that page.

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.

The portion of the low-income housing credit attributable to 

buildings placed in service after 2007 is not limited by tentative 

minimum tax. 

Taxpayers, other than partnerships, S corporations, estates, or 

trusts, whose only source of this credit is from those pass-through 

entities, are not required to complete or file this form. Instead, they 

can report this credit directly on Form 3800.

Qualified Low-Income Housing Project

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

section 42(h)(1) for details.

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.

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. 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

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.

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.

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.

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 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.

Line 6. Estates or trusts. Allocate the low-income housing credit 

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.

If the estate or trust is subject to the passive activity rules, include 

on line 4 any low-income housing credits attributable to buildings 

placed in service before 2008 from passive activities disallowed for 

prior years and carried forward to this year. Complete Form 8582-

CR, Passive Activity Credit Limitations, to determine the allowed 

credit that must be allocated between the estate or trust and the 

beneficiaries. For details, see the Instructions for Form 8582-CR.

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. Estates or trusts. Allocate the low-income housing credit 

on line 12 between the estate or trust and the beneficiaries in the 

same proportion as income was allocated and enter the 

beneficiaries’ share on line 13.

If the estate or trust is subject to the passive activity rules, include 

on line 11 any low-income housing credits attributable to buildings 

placed in service after 2007 from passive activities disallowed for 

prior years and carried forward to this year. Complete Form 8582-

CR, Passive Activity Credit Limitations, to determine the allowed 

credit that must be allocated between the estate or trust and the 

beneficiaries. For details, see the Instructions for Form 8582-CR.

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.

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.

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 shown below.

Recordkeeping . . . . . . . . . . . . 4 hr., 18 min. 

Learning about the law or the form . . . . . 1 hr., 37 min. 

Preparing and sending the form to the IRS . . . .4 hr., 9 min.

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.