Form 8586 

Department of the Treasury 

Internal Revenue Service (99)

Low-Income Housing Credit

▶ Attach to your tax return.

OMB No. 1545-0984

2010

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, report this

amount on Schedule K; all others, report this amount on Form 3800, line 1d . . . . . . . 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, line 1d . . 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. Partnerships and S corporations, report this amount on Schedule K; all 

others, continue to line 13 . . . . . . . . . . . . . . . . . . . . . . . 12

13 Low-income housing credit included on line 12 from passive activities (see instructions) . . . 13

14 Subtract line 13 from line 12 . . . . . . . . . . . . . . . . . . . . . . 14

15 Low-income housing credit allowed for 2010 from a passive activity (see instructions) . . . 15

16 Carryforward of low-income housing credit to 2010 (see instructions) . . . . . . . . . 16

17 Carryback of low-income housing credit from 2011 (see instructions) . . . . . . . . . 17

 18 Add lines 14 through 17. Estates and trusts, go to line 19; all others, report this amount on 

Form 3800, line 29d . . . . . . . . . . . . . . . . . . . . . . . . . 18

19 Amount allocated to beneficiaries of the estate or trust (see instructions) . . . . . . . . 19

20 Estates and trusts. Subtract line 19 from line 18. Report this amount on Form 3800, line 29d . 20

For Paperwork Reduction Act Notice, see instructions. Cat. No. 63987I Form 8586 (2010)
Form 8586 (2010) Page 2 

General Instructions

Section references are to the Internal Revenue Code unless otherwise 

noted.

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 and 

cannot be reported on page 1 of Form 3800. Part II is used to figure this 

portion of the credit. 

Taxpayers that are not partnerships, S corporations, estates, or trusts, 

and whose only source of this credit is from buildings placed in service 

before 2008 from those pass-through entities, are not required to 

complete or file this form. Instead, they can report this credit directly on 

line 1d of Form 3800, General Business Credit.

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. Allocate the amount 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.

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. Enter the amount included on line 12 that is from a passive

activity. Generally, a passive activity is a trade or business in which you 

did not materially participate. Rental activities are generally considered 

passive activities, whether or not you materially participate. For details, 

see Form 8582-CR, Passive Activity Credit Limitations (for individuals, 

estates, and trusts), or Form 8810, Corporate Passive Activity Loss and 

Credit Limitations (for corporations).

Line 15. Enter the passive activity low-income housing credit allowed 

for 2010 from Form 8582-CR or Form 8810.

Line 16. Enter any carryforward of the credit to 2010 attributable to 

buildings placed in service after 2007. Enter any carryforward of the 

credit to 2010 attributable to buildings placed in service before 2008 on 

Form 3800, line 6.

Line 17. Enter any carryback if you amend your 2010 return to carry

back an unused low-income housing credit from 2011. 

Line 19. Allocate the amount on line 18 between the estate or trust and 

the beneficiaries in the same proportion as income was allocated and 

enter the beneficiaries’ share on line 19.

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: 

Recordkeeping . . . . . . . . . . . . 5 hr., 44 min. 

Learning about the law or the form . . . . . . . 52 min. 

Preparing the form . . . . . . . . . . . 1 hr., 55 min. 

Copying, assembling, and sending the form to the IRS . . 16 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.