OMB No. 1545-0984

Form 8586 Low-Income Housing Credit

Department of the Treasury

Internal Revenue Service

Attachment

© Attach to your return. Sequence No. 36b

Name(s) as shown on return Identifying number

Current Year Low-Income Housing Credit (See instructions.)

1 Number of Forms 8609 attached ©

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

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

b 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)

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

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

a Shareholder

b Partner

c Beneficiary

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

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

Schedule K-1 (Form 1041), line 13

5 Credits from flow-through entities (if from more than one entity, see instructions):

5

6 Current year credit. Add lines 4 and 5 6

Tax Liability Limitation (See Who Must File Form 3800, General Business Credit, to see if you

complete Part II or file Form 3800)

7a Individuals. Enter amount from Form 1040, line 40 

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

c Other filers. Enter regular tax before credits from your return 

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

a Credit for child and dependent care expenses (Form 2441) 8a

b Credit for the elderly or the disabled (Schedule R (Form 1040)) 8b

c Foreign tax credit (Form 1116 or Form 1118) 8c

d Possessions tax credit (Form 5735) 8d

e Mortgage interest credit (Form 8396) 8e

8f f Credit for fuel from a nonconventional source 

g Orphan drug credit (Form 6765) 8g

h Add lines 8a through 8g 8h

9 Net regular tax. Subtract line 8h from line 7 9

10 Tentative minimum tax (see instructions):

a Individuals. Enter amount from Form 6251, line 20 

b Corporations. Enter amount from Form 4626, line 14 10

c Estates and trusts. Enter amount from Form 8656, line 37 

11 Net income tax:

a Individuals. Add line 9 above and line 22 of Form 6251 

b Corporations. Add line 9 above and line 16 of Form 4626 11

c Other filers. See instructions 

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

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

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

is your General Business Credit for 1991. 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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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.

Learning about the law

or the form 1 hr., 38 min.

Items You Should Note

Preparing and sending

the form to the IRS 4 hr., 12 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 hr., 44 min.

Form 8586 (1991)

Part I

Part II

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Cat. No. 63987I

EIN of flow-through entity

● The low-income housing credit has been

extended through June 30, 1992, for

buildings placed in service by that date.

There is an exception for certain buildings

financed by tax-exempt bonds subject to the

volume cap. See section 42(o). If the credit is

further extended, the IRS will use the media

to inform you.

● If you have a credit from a flow-through

entity, enter the entity’s EIN and the credit

amount on line 5. If you have a credit from

more than one entity, see the Line 5

instructions.

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Form 8586 (1991) Page 2

General Instructions

(Section references are to the Internal

Revenue Code unless otherwise noted.)

Purpose of Form

Who Must File Form 3800, General

Business Credit

Partnerships, S Corporations,

Estates, and Trusts

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

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, line 5a, of Form 8609.

Qualified Low-Income Housing

Project

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.

Except as noted below, 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.

Note: You do not need to obtain or 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.

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.

Except as noted below, you must still get a

Form 8609 from the applicable housing credit

agency (with Part I completed, including an

assigned building 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)(4)(iii) for the meaning of

“functionally related and subordinate”).

Recapture of Credit

Recordkeeping Requirements

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, if required.

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 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 more than

one flow-through entity, attach a statement

that shows the EIN and credit amount for

each entity. Enter the total credit 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 10. Tentative minimum tax.—Complete

the appropriate alternative minimum tax form

through the tentative minimum tax line.

Transfer the entry to this line.

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.

Line 12. Limitation.—See section 38(c)(2) for

special rules for married couples filing

separate returns, for controlled corporate

groups, and for estates and trusts.

Note: If you cannot use part or all of the

credit because of the tax liability limitation,

you may carry the excess to other years. Use

Form 3800.

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.

Owners of residential rental buildings

providing low-income housing use Form 8586

to claim the low-income housing credit.

The general business credit consists of the

investment credit (Form 3468), jobs credit

(Form 5884), credit for alcohol used as fuel

(Form 6478), research credit (Form 6765),

low-income housing credit (Form 8586),

disabled access credit (Form 8826), and

enhanced oil recovery credit (Form 8830). If

you have: (1) more than one of these credits

for 1991; (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, which is also used to

figure the tax liability limitation. If you have

only a 1991 low-income housing credit and

the credit is not from a passive activity,

complete Part II. You do not have to file Form

3800 for this year.

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.

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 (20–50 or 40–60

(25–60 for New York City only)). See the

instructions for line 5(c), Part II on Form 8609

for details.

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).

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.