Cat. No. 63987I

OMB No. 1545-0984

Form 8586 Low-Income Housing Credit

Department of the Treasury

Internal Revenue Service

Attachment

 Attach to your tax return. Sequence No. 36a

Name(s) shown on return Identifying number

Current Year Credit

1 Number of Forms 8609-A attached 

2

3 3

Has there been a decrease in the qualified basis of any buildings since the close of the preceding

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

Current year credit from attached Form(s) 8609-A (see instructions)

4

If you are a— Then enter the total of the current year credits from—

a Shareholder Schedule K-1 (Form 1120S), box 13, codes A and B

5

Low-income housing credits from pass-through entities (if more than one entity, see instructions):

4

6

Add lines 3 and 4. See instructions to find out if you complete lines 6 through 17 or file Form 3800 5

Allowable Credit

Form 8586 (2005)

Part I

EIN of pass-through entity

–

7

Current year credit or passive activity credit (see instructions) 6

tax year?

buildings that had a decreased basis. If you need more space, attach a schedule.

Yes No If “Yes,” enter the building identification numbers (BINs) of the

Part II

For Paperwork Reduction Act Notice, see back of form.

b Partner

c Beneficiary

Schedule K-1 (Form 1065), box 15, codes A and B; or

Schedule K-1 (Form 1065-B), box 8

Schedule K-1 (Form 1041), box 13, code C

● Individuals. Enter the amount from Form 1040, line 44

7

Corporations. Enter the amount from Form 1120, Schedule J, line 3; Form 1120-A,

Part I, line 1; or the applicable line of your return

●

●

11

10a

b Credits from Form 1040, lines 48 through 54 10b

Foreign tax credit

Possessions tax credit (Form 5735, line 17 or 27)

Nonconventional source fuel credit (Form 8907, line 23)

Other specified credits (see instructions)

Add lines 10a through 10e 10f

11

12

Net income tax. Subtract line 10f from line 9. If zero, skip lines 12 through 15 and enter -0- on

line 16

9

Alternative minimum tax:

● Individuals. Enter the amount from Form 6251, line 35

● Corporations. Enter the amount from Form 4626, line 14 8

● Estates and trusts. Enter the amount from Form 1041, Schedule I, line 56

15

Tentative minimum tax (see instructions):

14

13 Enter 25% (.25) of the excess, if any, of line 12 over $25,000 (see

instructions)

16 Subtract line 15 from line 11. If zero or less, enter -0-

15

17 Credit allowed for the current year. Enter the smaller of line 6 or line 16 here and on Form

1040, line 55; Form 1120, Schedule J, line 6d; Form 1120-A, Part I, line 2; Form 1041, Schedule

G, line 2c; or the applicable line of your return. If line 16 is smaller than line 6, see instructions 17



8

Regular tax before credits:

10a

Add lines 7 and 8 9

14

Enter the greater of line 13 or line 14

c

d

e

10c

10d

Estates and trusts. Enter the sum of the amounts from Form 1041, Schedule G, lines 1a

and 1b, or the amount from the applicable line of your return

Net regular tax. Subtract line 10f from line 7. If zero or less, enter -0-

16



(99)

10e

f

12

13

 See instructions on back.

● Individuals. Enter the amount from Form 6251, line 33

● Corporations. Enter the amount from Form 4626, line 12

● Estates and trusts. Enter the amount from Form 1041,

Schedule I, line 54 

2005
Form 8586 (2005) Page 2

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. Also, the credit cannot

exceed the amount allocated to the building.

See section 42(h)(1) for details. No allocation

is needed when (a) 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 (b) 70% or more of the aggregate

basis of the building and land is financed with

certain tax-exempt bonds issued before 1990.

“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

Recordkeeping

Specific Instructions

Unless you are claiming the credit from a

pass-through entity (such as an 

S Corporation, partnership, estate, or trust),

you must have a properly signed and

completed Form 8609, and you must also

complete Form 8609-A, in order to claim the

credit. If all your credits are from

pass-through entities, skip lines 1 through 3.

Line 1. If any of the attached Forms 8609-A

are for buildings that are part of a multiple

building project (defined in instructions for

Part II of Form 8609), attach a schedule

listing for each project (a) the name and

address of the project and each building in

the project, (b) the building identification

number (BIN) of each building, (c) the

aggregate credit dollar amount for the project,

and (d) the credit allocated to each building.

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 a pass-through entity with a line 3

credit attributable to more than one building,

attach a schedule to Form 8586 that shows

each shareholder’s, partner’s, or beneficiary’s

name, identifying number, and share of the

line 3 credit and the BIN for each building.

Line 4. If you have a credit from a

pass-through entity, enter the entity’s

employer identification number (EIN) and the

credit amount on line 4. If you have credits

from more than one pass-through entity,

attach a statement that shows the EIN and

credit amount for each entity. Enter the total

credit on line 4.

Line 14. Although you may not owe alternative

minimum tax (AMT), you generally must still

compute the tentative minimum tax (TMT) to

figure your credit. For a small corporation

exempt from the AMT under section 55(e),

enter zero. Otherwise, complete and attach the

applicable AMT form or schedule.

Line 13. See section 38(c)(5) for special rules

that apply to married couples filing separate

returns, controlled corporate groups,

regulated investment companies, real estate

investment trusts, and estates and trusts.

Line 17. If you cannot use all of the credit

because of the tax liability limit (line 16 is

smaller than line 6), carry the unused credit

back 1 year and then forward up to 20 years.

See the instructions for Form 3800 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.

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. If you must recapture

credits, use Form 8611, Recapture of

Low-Income Housing Credit. See section 42(j)

for details.

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.

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.

S Corporations, Partnerships,

Estates, and Trusts

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.

Complete Part I to figure the credit to pass

through to the shareholders, partners, or

beneficiaries. Attach Form 8586 to the

pass-through income tax return along with

Form 8609-A, Annual Statement for

Low-Income Housing Credit, for each

building. An electing large partnership treats

the part of the credit attributable to property

placed in service before 1990 as a

“rehabilitation credit” when reporting the

credit to its partners.

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, 1 hr., 37 min.; Preparing the form, 3 hr.,

39 min.; Copying, assembling, and sending

the form to the IRS, 32 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.

Section references are to the Internal Revenue

Code unless otherwise noted.

General Instructions

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; it is

taken over a 10-year credit period. The

present value of the 10 annual credit amounts

equals 70% of the building’s qualified basis

(30% for certain federally subsidized new

buildings or existing buildings).

Caution. If you are subject to recapture, go

to Form 8611 before computing the amount

of any carryforward of the low-income

housing credit. The recapture may reduce the

amount of any carryforward of the credit to

Form 3800, General Business Credit. See the

instructions for line 5.

Line 10e. Include on line 10e any amounts

claimed on:

Line 6. The line 5 credit may be subject to

the passive activity credit limitation.

Individuals, estates, and trusts figure the limit

on Form 8582-CR, Passive Activity Credit

Limitations. Personal service and closely held

corporations figure the limit on Form 8810,

Corporate Passive Activity Loss and Credit

Limitations. If this limitation applies, enter the

allowable credit from Form 8582-CR or 8810

on line 6. If line 6 is zero, skip Part II. If you

are not subject to the passive activity

limitation, enter the line 5 amount on line 6.

Line 5. The credit allowed for the current year

may be limited based on your tax liability.

Complete line 6 and Part II to figure the

allowable credit unless you must file Form

3800. You must file Form 3800 if you have (a)

more than one credit included in the general

business credit (other than a credit from Form

8844, Form 6478, or Section B of Form 8835)

or (b) a carryback or carryforward of any of

those credits. See the instructions for Form

3800 to find out which credits are included in

the general business credit.

● Form 8834, Qualified Electric Vehicle

Credit, line 20,

● Form 8910, Alternative Motor Vehicle

Credit, line 18, and

● Form 8911, Alternative Fuel Vehicle

Refueling Property Credit, line 19.