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) 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. (See instructions to see if you complete Part II or file Form 3800.) 6

Tax Liability Limitation

8a 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) 8

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

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

a Credit for child and dependent care expenses (Form 2441) 9a

b Credit for the elderly or the disabled (Schedule R (Form 1040)) 9b

c Foreign tax credit (Form 1116 or Form 1118) 9c

d Possessions tax credit (Form 5735) 9d

e Mortgage interest credit (Form 8396) 9e

9f f Credit for fuel from a nonconventional source 

9g g Orphan drug credit (Form 6765) 

h Add lines 9a through 9g 9h

Net regular tax. Subtract line 9h from line 8 10

Tentative minimum tax (see instructions):

10

a Individuals. Enter amount from Form 6251, line 20 

b Corporations. Enter amount from Form 4626, line 15

c Estates and trusts. Enter amount from Form 1041, Schedule H, line 37 

11

Net income tax:

a Individuals. Add line 10 above and line 22 of Form 6251 

11

b Corporations. Add line 10 above and line 17 of Form 4626

c Estates and trusts. Add line 10 above and line 39 of Form 1041, Schedule H

12

If line 10 is more than $25,000, enter 25% (.25) of excess (see instructions) 

12

13

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

13

Low-income housing credit allowed for current year. Enter the smaller of line 7 or line 14. This

is your General Business Credit for 1992. 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

15

15

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., 32 min.

Items To Note

Preparing and sending

the form to the IRS 4 hr., 6 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., 59 min.

Form 8586 (1992)

Part I

Part II

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%

%

%

EIN of flow-through entity

● The authority of housing credit agencies to

make current year credit allocations begins to

● If you have only the low-income credit

portion of the general business credit and

have no carryback or carryforward of the

general business credit, do not complete

Form 3800. See line 6 instructions.

–

7 Passive activity credit or current year credit for 1992 (see instructions) 

14 14

● 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.

7

phase-out after June 30, 1992. There is an

exception for certain buildings financed by

tax-exempt bonds subject to the volume cap.

See section 42(o).
Form 8586 (1992) Page 2

General Instructions

(Section references are to the Internal

Revenue Code unless otherwise noted.)

Purpose of Form

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.

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, Low-income

Housing Credit Allocation Certification.

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 by the close of 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

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 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 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, 6,

and 7 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, line 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.

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.

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 the line 6 credit is your only 1992

general business credit (see Note below) and

you do not have a carryback or carryforward

of any general business credit, complete lines

7 through 15 to determine your allowed

low-income housing credit.

Line 11.—Enter the tentative minimum tax

(TMT) that was figured on the appropriate

alternative minimum tax (AMT) form or

schedule. Although you may not owe AMT,

you must still compute the TMT to figure your

credit.

Line 13.—See section 38(c)(2) for special

rules for married couples filing separate

returns, for controlled corporate groups, and

for estates and trusts.

Line 15.—If you cannot use part or all of the

credit because of the tax liability limitation

(line 15 is smaller than line 7), carry the

excess to other years. See the separate

Instructions for Form 3800 for details.

Owners of residential rental buildings

providing low-income housing use Form 8586

to claim the low-income housing credit.

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,

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 in the qualified basis of

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 the instructions for Form 8611 and

section 42(j) for more information.

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.

Part I

If you have more than one general business

credit or a carryback or carryforward of any

general business credit, 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.

Note: The general business credit consists of

serveral credits including 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), enhanced oil recovery

credit (Form 8830), and the renewable

electricity production credit (Form 8835).

Line 7.—The line 6 credit may be limited by

the passive activity credit limitations.

Individuals, estates, and trusts must complete

Form 8582-CR, Passive Activity Credit

Limitations. Closely held corporations and

personal service corporations must complete

Form 8810, Passive Activity Loss and Credit

Limitations. Enter the credit allowed from

Form 8582-CR or Form 8810 on line 7.

Corporations not required to complete Form

8810 should enter the amount from line 6 on

line 7.

Part II

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.

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.