Cat. No. 63987I

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) shown on return Identifying number

Current Year 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

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

4 Current year credit (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 Schedule K-1 (Form 1120S), lines 12b(1) and (2)

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

5

6 Add lines 4 and 5. (See instructions to find out if you complete lines 7 through 18 or file Form 3800.) 6

Tax Liability Limit

Form 8586 (2001)

Part I

EIN of pass-through entity

–

7 Passive activity credit or total current year credit for 2001 (see instructions) 7

tax year?

building(s) that had a decreased basis. If more space is needed, attach a schedule to list the BINs.

Yes No If “Yes,” enter the building identification number (BIN) of the

Part II

For Paperwork Reduction Act Notice, see back of form.

b Partner

c Beneficiary

Schedule K-1 (Form 1065), lines 12a(1) and (2), or

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

Schedule K-1 (Form 1041), line 14

● Individuals. Enter the amount from Form 1040, line 40

8

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

●

●

11a 11a

Credit for child and dependent care expenses (Form 2441, line 9) 11b

Credit for the elderly or the disabled (Schedule R (Form 1040), line 20)

b

11d

Foreign tax credit

d

e 11e

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

11f f

11g g

Credit for fuel from a nonconventional source

h

Qualified electric vehicle credit (Form 8834, line 20)

Add lines 11a through 11l 11m

12 Net income tax. Subtract line 11m from line 10. If zero, skip lines 13 through 16 and enter -0- on line 17 12

9 Alternative minimum tax:

● Individuals. Enter the amount from Form 6251, line 28

● Corporations. Enter the amount from Form 4626, line 15 9

● Estates and trusts. Enter the amount from Form 1041, Schedule I, line 39

13 Tentative minimum tax (see instructions):

● Individuals. Enter the amount from Form 6251, line 26

● Corporations. Enter the amount from Form 4626, line 13 13

●

14

Enter 25% (.25) of the excess, if any, of line 14 over $25,000 (see instructions)

16

Subtract line 16 from line 12. If zero or less, enter -0-

16

17

Low-income housing credit allowed for the current year. Enter the smaller of line 7 or line

17 here and on Form 1040, line 50; Form 1120, Schedule J, line 6d; Form 1120-A, Part I, line

4a; Form 1041, Schedule G, line 2c; or the applicable line of your return 18



Mortgage interest credit (Form 8396, line 11)

c 11c

8 Regular tax before credits:

10 Add lines 8 and 9 10

15

Enter the greater of line 13 or line 15

14

15

i

Adoption credit (Form 8839, line 14) 11h

District of Columbia first-time homebuyer credit (Form 8859, line 11) 11i

j

k

l

Child tax credit (Form 1040, line 48)

Education credits (Form 8863, line 18)

11j

11k

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 11m from line 8. If zero or less, enter -0-

18

17



(99)

2001

Estates and trusts. Enter the amount from Form 1041, Schedule I, line 37 

11l

m

Rate reduction credit (Form 1040, line 47)
Form 8586 (2001) Page 2

Qualified Low-Income Housing

Project

Except as noted in the Specific Instructions,

you must obtain a Form 8609 (with Part I

completed) from the state or local housing credit

agency for each building for which you are

claiming a credit. Attach to your return a copy of

Form 8609 and accompanying Schedule A (Form

8609) for each building for each tax year during

the 15-year compliance period, unless a credit is

not being claimed because the entire credit has

been claimed in prior tax years and the qualified

basis of the building has not decreased for this

tax year. You must also certify certain first-year

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. Generally, the

allocation must be received by the close of the

calendar year the building is placed in service. In

addition, the credit cannot exceed the amount

allocated to the building by the housing credit

agency. 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 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) for the meaning

of “functionally related and subordinate”).

Recapture of Credit

Recordkeeping

Specific Instructions

Note: If your only credit is from a pass-through

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

trust), you do not have to obtain, complete, or

attach Form 8609 or Schedule A (Form 8609) to

Form 8586. Also, skip lines 1 through 4.

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 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 in

the project, (c) the aggregate credit dollar

amount for the project, and (d) 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.

Line 4. The line 4 credit for the year is figured on

Schedule A (Form 8609) for each building.

Attach copies of Form(s) 8609 and Schedule(s) A

(Form 8609) to Form 8586 for each tax year a

credit is claimed. Enter on line 4 the credit from

Schedule A (Form 8609). If more than one Form

8609 and related Schedules A are attached,

enter on line 4 the total credit from all attached

Schedules A.

For a pass-through entity with a line 4 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 4 credit

and the BIN for each building.

Line 5. If you have a credit from a pass-through

entity, enter the entity’s employer identification

number (EIN) and the credit amount on line 5. 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 5.

Line 6. If the line 6 credit is your only 2001

general business credit (see Note below) and

you do not have a carryback or carryforward of

any general business credit, complete line 7 and

Part II to determine your allowed low-income

housing credit. If you have more than one of the

credits included in the general business credit, a

carryback or carryforward of any of these

credits, or general credits from an electing large

partnership (Schedule K-1, (Form 1065-B)),

Line 13. 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 and enter the

TMT on line 13.

Line 15. See section 38(c)(3) 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 18. If you cannot use part or all of the

credit because of the tax liability limit (line 17 is

smaller than line 7), carry the excess back

1 year and then forward 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 (20–50 or 40–60

(25–60 for New York City only)). 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.

Use Form 8611, Recapture of Low-Income

Housing Credit. See the instructions for Form

8611 and section 42(j) for more information.

Keep a copy of this Form 8586 together with all

Forms 8609, Schedules A (Form 8609), and

Form 8611 for 3 years after the 15-year

compliance period ends.

Line 7. The credit on line 6 may be subject to

the passive activity credit limitation. Individuals,

estates, and trusts figure the limit on Form

8582-CR, Passive Activity Credit Limitations, and

closely held corporations figure the limit on

Form 8810, Corporate Passive Activity Loss and

Credit Limitations. See the instructions for Form

8582-CR or 8810 to find out if this limitation

applies. If so, enter the allowable credit from

Form 8582-CR or 8810 on line 7. If line 7 is zero,

skip Part II. If you are not subject to the passive

activity limitation, enter on line 7 the amount

from line 6.

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

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 more information.

Complete Part I to figure the credit to pass

through to the shareholders, partners, or

beneficiaries. Attach Form 8586 to the entity’s

income tax return along with Form 8609, and

Schedule A (Form 8609), Annual Statement, 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.

Learning about the law

or the form 1 hr., 37 min.

The time needed to complete and file this

form will vary depending on individual

circumstances. The estimated average time is:

Recordkeeping 7 hr., 53 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.

Preparing the form 3 hr., 41 min.

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

10a, of Form 8609, Low-Income Housing Credit

Allocation Certification.

Note: The general business credit consists of the

following credits: investment (Form 3468), work

opportunity (Form 5884), welfare-to-work (Form

8861), alcohol used as fuel (Form 6478), research

(Form 6765), low-income housing (Form 8586),

disabled access (Form 8826), enhanced oil

recovery (Form 8830), renewable electricity

production (Form 8835), Indian employment

(Form 8845), employer social security and

Medicare taxes paid on certain employee tips

(Form 8846), orphan drug (Form 8820), new

markets (Form 8874), contributions to selected

community development corporations (Form

8847), and trans-Alaska pipeline liability fund.

The empowerment zone employment credit,

while a component of the general business

credit, is figured separately on Form 8844 and is

never carried to Form 3800.

Copying, assembling, and

sending the form to the IRS 32 min.

Section references are to the Internal Revenue

Code.

General Instructions

Purpose of Form

Use Form 8586 to claim the low-income housing

credit.

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% for 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.

information to the IRS on Form 8609. If this

certification is not made, you may not claim a

credit for that building.

do not complete line 7 or Part II. Enter the line 6

credit on Form 3800, General Business Credit,

and complete Form 3800 to determine your

allowed credit.