US Internal Revenue Service: i8582cr--1992

8/14/2019 US Internal Revenue Service: i8582cr--1992

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Cat. No. 64649B

Instructions for Form 8582-CRPassive Act ivity Credit Limitations

(Section references are to the Internal Revenue Code unless otherwise noted. )

Department of the TreasuryInternal Revenue Service

Paperwork Reduction ActNoticeWe ask for the information on this formto carry out the Internal Revenue laws ofthe United States. You are required togive us the information. We need it toensure that you are complying withthese laws and to allow us to figure andcollect the right amount of tax.

The time needed to complete and filethis form will vary depending onindividual circumstances. The estimatedaverage time is:

Recordkeeping 2 hr., 5 min.Learning about the lawor the form 4 hr., 19 min.

Preparing the form 3 hr., 4 min.

Copying, assembling,and sending theform to the IRS 2 hr., 1 min.

If you have comments concerning theaccuracy of these time estimates orsuggestions for making this form moresimple, we would be happy to hear fromyou. You can write to both the IRS andthe Office of Management and Budgetat the addresses listed in the

instructions for the tax return with whichthis form is filed.

General Instructions

Purpose of FormForm 8582-CR is used by noncorporatetaxpayers to determine the amount ofany passive activity credit for the currenttax year (including any prior yearunallowed credits) and the amount ofcredit allowed for the current year.

Passive activity credits that are notallowed in the current year are carriedforward until they are allowed against

the tax attributable to either net passiveincome or the special allowance, ifapplicable.

Different rules apply to your activitiesand the related credit, depending on thetype of activity. There are two kinds ofpassive activities: trade or businessactivities in which you did not materiallyparticipate for the tax year, and rentalactivities regardless of your participation.See Trade or Business Activities onpage 3 and Rental Activities on page 2.

Note: Corporations subject to thepassive activity rules must useForm8810, Corporate Passive Activity Lossand Credit Limitations.

Who Must FileForm 8582-CR is filed by individuals,estates, and trusts with any of thefollowing credits from passive activities:

Investment credit (including therehabilitation credit, energy credit, andreforestation credit);

Jobs credit;

Credit for alcohol used as fuel;

Credit for increasing researchactivities;

Low-income housing credit;

Disabled access credit;

Enhanced oil recovery credit;

Renewable electricity productioncredit;

Orphan drug credit;

Credit for fuel produced from anonconventional source; and

Qualified electric vehicle credit.

Credits from passive activities are anyof the above credits from:

A trade or business activity in whichyou did not materially participate. SeeTrade or Business Activities on page 3.

A rental activity. See Rental Activitieson page 2.

Overview of FormThe form consists of five parts.

Part I1992 Passive ActivityCredits

Use Part I to combine your credits frompassive activities to determine if youhave a passive activity credit for 1992.

If your credits from all passiveactivities exceed the tax attributable tonet passive income, you will have apassive activity credit for 1992.Generally, you have net passive incomeif line 3 of Form 8582 shows income.See the instructions for line 6 of Form8582-CR on page 9 for exceptions.

Part IISpecial Allowance forRental Real Estate Activities WithActive Participation

Use Part II to figure the credit allowed ifyou have any credits from rental realestate activities in which you activelyparticipated (other than rehabilitationcredits and low-income housing credits).(See Rental Activities on page 2 fordetails.)

Part IIISpecial Allowance forRehabilitation Credits From RentalReal Estate Activities and

Low-Income Housing Credits forProperty Placed in Service Before1990 (or From Pass-ThroughInterests Acquired Before 1990)

Use Part III to figure the credit allowed ifyou have any rehabilitation credits orlow-income housing credits for propertyplaced in service before 1990. Also usethis part if your low-income housingcredit is from a partnership,S corporation, or other pass-throughentity in which you acquired yourinterest before 1990, regardless of thedate the property was placed in service.

Part IVSpecial Allowance forLow-Income Housing Credits forProperty Placed in Service After1989

Use Part IV to figure the credit allowed ifyou have any low-income housingcredits for property placed in serviceafter 1989. If you held an indirectinterest in the property through apartnership, S corporation, or otherpass-through entity, use this part only ifyour interest in the pass-through entitywas also acquired after 1989.

Part VPassive Activity Credit

AllowedUse Part V to figure the amount of thepassive activity credit (as determined inPart I) that is allowed for 1992 for allpassive activities.

Before reading the instructions thatfollow, see Example of How ToComplete Form 8582-CR, which beginson page 5. The example goes through a4-step analysis of how the form andworksheets should be completed for apartner in a limited partnership that hasa low-income housing credit. This


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example may provide enoughinformation to complete the form andworksheets without reading all of theinstructions.

Activities That Are NotPassive ActivitiesThe following are not passive activities:

1. Trade or business activities in whichyou materially participated for the taxyear.

2. An interest in an oil or gas welldrilled or operated under a workinginterest if at any time during the tax yearyou held the working interest directly orthrough an entity that did not limit yourliability (such as a general partnerinterest in a partnership). This exceptionapplies regardless of whether youmaterially participated in the activity forthe tax year.

If, however, your liability was notunlimited for the entire year (e.g., youconverted your general partner interestto a limited partner interest during theyear), some of your income and lossesfrom the working interest may be treatedas passive activity gross income andpassive activity deductions. SeeTemporary Regulations section1.469-1T(e)(4)(ii).

3. The rental of a dwelling unit youused as a residence if section 280A(c)(5)applies. This exception applies if yourented out a dwelling unit that you alsoused as a home during the year for anumber of days which exceeds thegreater of 14 days or 10% of thenumber of days during the year that thehome was rented at a fair rental.

4. An activity of trading personalproperty for the account of owners of

interests in the activity. See TemporaryRegulations section 1.469-1T(e)(6).

Credits from activities that are notpassive activities should not be enteredon Form 8582-CR. However, they maybe subject to other limitations.

Rental ActivitiesA rental activity is a passive activity evenif you materially participated in theactivity. However, if you meet any one ofthe six exceptions listed below, therental of the property is not treated as arental activity. See Reporting CreditsFrom the Activities below if you meetany of the exceptions.

An activity is a rental activity iftangible property (real or personal) isused by customers or held for use bycustomers, and the gross income (orexpected gross income) from the activityrepresents amounts paid (or to be paid)mainly for the use of the property. Theactivity is considered a rental activityeven if the use is under a lease, aservice contract, or some otherarrangement that is not called a lease.

Exceptions

An activity is not a rental activity if:

1. The average period of customeruse of the rental property is 7 days orfewer.

Figure the average period of customeruse for a class of property by dividingthe total number of days in all rentalperiods by the number of rentals duringthe tax year. If the activity involvesrenting more than one class of property,multiply the average period of customeruse of each class by the ratio of thegross rental income from that class tothe activitys total gross rental income.The activitys average period ofcustomer use equals the sum of theseclass-by-class average periods weightedby gross income. See Regulationssection 1.469-1(e)(3)(iii).

2. The average period of customer use(see definition in 1 above) of the rentalproperty is 30 days or less, andsignificant personal services wereprovided in connection with making therental property available for customeruse.

Significant personal services includeonly services performed by individuals.In determining whether personalservices are significant, all of therelevant facts and circumstances aretaken into consideration. Facts andcircumstances include the frequency ofthe services provided, the type andamount of labor required to perform theservices, and the value of the servicesrelative to the amount charged for use ofthe property.

Significant personal services do notinclude excluded services (seeTemporary Regulations section

1.469-1T(e)(3)(iv)(B)).3. Extraordinary personal serviceswere provided in connection with makingthe rental property available forcustomer use.

Services provided in connection withmaking rental property available forcustomer use are extraordinary personalservices only if the services areperformed by individuals, and thecustomers use of the rental property isincidental to their receipt of the services.

4. The rental of the property isincidental to a nonrental activity.

The rental of property is incidental to

an activity of holding property forinvestment if the main purpose ofholding the property is to realize a gainfrom the appreciation of the property,and the gross rental income is less than2% of the smaller of the unadjustedbasis of the property or the fair marketvalue of the property.

Unadjusted basis means the cost ofthe property without regard todepreciation deductions or any otheradjustment described in section 1016that reduces basis.

The rental of property is incidental toa trade or business activity if:

a. You own an interest in the trade orbusiness activity during the tax year;

b. The rental property was mainlyused in the trade or business activityduring the tax year or during at least 2of the 5 preceding tax years; and

c. The gross rental income from theproperty is less than 2% of the smallerof the unadjusted basis of the propertyor the fair market value of the property.

Lodging provided for the employersconvenience to an employee or theemployees spouse or dependents isincidental to the activity or activities inwhich the employee performs services.

5. You customarily make the rentalproperty available during definedbusiness hours for nonexclusive use byvarious customers.

6. You provide property for use in anonrental activity of a partnership, anS corporation, or joint venture in yourcapacity as an owner of an interest insuch partnership, S corporation, or jointventure.

Reporting Credits From theActivities

If you meet any of the six exceptionslisted above, your rental of the propertyis not a rental activity. You then mustdetermine whether your rental of theproperty is a trade or business activityand, if so, whether you materiallyparticipated in the activity for the taxyear (see Trade or Business Activitiesand Material Participation on page 3).If the activity is a trade or businessactivity in which you did not materiallyparticipate, enter the credits from the

activity in Worksheet 4 on page 11.If you meet any of the six exceptions

listed above, and the activity is a tradeor business activity in which youmaterially participated, report the creditsfrom the activity on the form younormally use.

If you did not meet any of the sixexceptions, the rental activity is apassive activity. Special rules apply ifyou conduct the rental activity through apublicly traded partnership (PTP). SeePublicly Traded Partnerships (PTPs) onpage 14. If the rental activity is notconducted through a PTP, the rentalactivity is entered in Worksheet 1, 2, 3,or 4 on pages 10 and 11.

Worksheet 1 is for credits (other thanrehabilitation credits and low-incomehousing credits) from rental real estateactivities in which you activelyparticipated. However, marriedindividuals who file separate tax returnsbut did not live apart at all times duringthe tax year must use Worksheet 4 evenif there was active participation.

Worksheet 2 is for rehabilitationcredits from rental real estate activities


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and low-income housing credits forproperty placed in service before 1990.This worksheet is also used forlow-income housing credits from apartnership, S corporation, or otherpass-through entity if your interest in thepass-through entity was acquired before1990, regardless of the date the propertywas placed in service.

Worksheet 3 is for low-incomehousing credits for property placed inservice after 1989 (unless held through a

pass-through entity in which youacquired your interest before 1990).

Worksheet 4 is for credits from tradeor business activities in which you didnot materially participate and rental realestate activities without activeparticipation (but not rehabilitationcredits from rental real estate activitiesand low-income housing credits).

See Special Allowance for CreditsFrom Rental Real Estate Activitiesbelow.

Special Allowance forCredits From Rental Real

Estate ActivitiesIf you actively participated in a rentalreal estate activity, you may be able toclaim credits from the activity to theextent of the tax attributable to a specialallowance of up to $25,000, reduced byany passive losses allowed under thisexception on Form 8582. The specialallowance also applies to low-incomehousing credits and rehabilitation creditsfrom a rental real estate activity, even ifyou did not actively participate in theactivity. The credits allowed under thespecial allowance are in addition to thecredits allowed to the extent of the tax

attributable to net passive income.Married individuals filing separate

returns who did not live apart at alltimes during the year and trusts cannotuse the special allowance. An estate canuse the special allowance only for its taxyears ending less than 2 years after thedecedents death.

Only individuals and qualifying estatescan actively participate in a rental realestate activity. Limited partners cannotactively participate unless futureregulations provide an exception. Inaddition, you are not considered toactively participate in a rental real estate

activity if at any time during the tax yearyour interest (including your spousesinterest) in the activity was less than10% (by value) of all interests in theactivity.

Active participation is a less stringentrequirement than material participation(see Material Participation below). Youmay be treated as actively participatingif you participated, for example, inmaking management decisions orarranging for others to provide services(such as repairs) in a significant and

bona fide sense. Management decisionsthat can count as active participationinclude approving new tenants, decidingon rental terms, approving capital orrepair expenditures, and other similardecisions.

An estate is treated as activelyparticipating for tax years ending lessthan 2 years after the date of thedecedents death if the decedent wouldhave satisfied the active participationrequirements for the activity for the tax

year in which the decedent died. Suchan estate is a qualifying estate.

The maximum special allowance thatsingle individuals and married individualsfiling a joint return for the tax year canqualify for is $25,000. The maximum is$12,500 in the case of marriedindividuals who file separate returns forthe tax year but only if they lived apartat all times during the tax year. Themaximum special allowance for whichan estate can qualify is $25,000 reducedby the special allowance for which thesurviving spouse qualified.

If your modified adjusted grossincome is $100,000 or less ($50,000 orless if married filing separately), figureyour credits based on the amount of themaximum special allowance referred toin the preceding paragraph. If yourmodified adjusted gross income is morethan $100,000 ($50,000 if married filingseparately), the special allowance islimited to 50% of the difference between$150,000 ($75,000 if married filingseparately) and your modified adjustedgross income. When modified adjustedgross income is $150,000 or more($75,000 or more if married filingseparately), there is no specialallowance.

However, in the case of low-incomehousing credits for property placed inservice before 1990, and rehabilitationcredits, the limits on modified adjustedgross income are increased. If yourmodified adjusted gross income is morethan $200,000 ($100,000 if married filingseparately), the special allowance islimited to 50% of the difference between$250,000 ($125,000 if married filingseparately), and your modified adjustedgross income. When modified adjustedgross income is $250,000 or more($125,000 or more if married filingseparately), there is no specialallowance.

See the instructions for line 10 (onpage 9) for the definition of modifiedadjusted gross income.

The modified adjusted gross incomelimitation does not apply when figuringthe special allowance for low-incomehousing credits for property placed inservice after 1989 (other than from apass-through entity in which youacquired your interest before 1990).

Complete Part I first to determine yourcredits from all rental real estate

activities and your passive activity credit.You have a passive activity credit if line7 shows an amount other than zero.Complete Part II if you have credits(other than low-income housing andrehabilitation credits) from rental realestate activities in which you activelyparticipated. Complete Part III if youhave low-income housing credits fromproperty placed in service before 1990(or any low-income housing credits froma pass-through entity in which youacquired your interest before 1990), orrehabilitation credits from rental realestate activities. Complete Part IV if youhave low-income housing credits forproperty placed in service after 1989(other than from a pass-through entity inwhich you acquired your interest before1990).

Caution: You cannot claim thelow-income housing credit on anyqualified low-income housing project ifyou or any other individual use thetransitional rule for the passive loss rulesunder section 502 of the Tax Reform Actof 1986.

Trade or Business ActivitiesA trade or business activity is anactivity (other than a rental activity or anactivity treated as incidental to anactivity of holding property forinvestment) that:

1. Involves the conduct of a trade orbusiness (within the meaning of section162),

2. Is conducted in anticipation ofstarting a trade or business, or

3. Involves research or experimentalexpenditures deductible under section174 (or that would be if you chose to

deduct rather than capitalize them).Material Participation

In general.Participation, for purposesof the material participation tests listedon page 4, generally includes any workyou did in connection with an activity ifyou owned an interest in the activity atthe time you did the work. The capacityin which you did the work does notmatter. However, work is not treated asparticipation if it is not work that anowner would customarily do in the sametype of activity and one of your mainpurposes for doing the work was toavoid the disallowance of losses or

credits from the activity under thepassive activity rules.

Work you did as an investor in anactivity is not treated as participationunless you were directly involved in theday-to-day management or operationsof the activity. Work done as an investorincludes:

1. Studying and reviewing financialstatements or reports on operations ofthe activity.


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2. Preparing or compiling summariesor analyses of the finances or operationsof the activity for your own use.

3. Monitoring the finances oroperations of the activity in anonmanagerial capacity.

You may prove your participation in anactivity by any reasonable means. Youdo not have to maintaincontemporaneous daily time reports,logs, or similar documents if you canestablish your participation by other

reasonable means. Reasonable meansfor this purpose may include, but are notlimited to, the identification of servicesperformed over a period of time and theapproximate number of hours spentperforming the services during thatperiod, based on appointment books,calendars, or narrative summaries.

Participation by your spouse duringthe tax year in an activity you own maybe counted as your participation in theactivity. The participation by your spousemay be included as your participationeven if your spouse did not own aninterest in the activity and whether ornot you and your spouse file a jointreturn for the tax year.

Tests for individuals.You materiallyparticipated for the tax year in a trade orbusiness activity if you satisfy one ormore of the following tests:

1. You participated in the activity formore than 500 hours.

2. Your participation in the activity forthe tax year was substantially all of theparticipation in the activity of allindividuals (including individuals who didnot own any interest in the activity) forthe year.

3. You participated in the activity for

more than 100 hours during the tax year,and you participated at least as much asany other individual (including individualswho did not own any interest in theactivity) for the year.

4. The activity is a significantparticipation activity for the tax year, andyou participated in all significantparticipation activities during the year formore than 500 hours. A significantparticipation activity is any trade orbusiness activity in which youparticipated for more than 100 hoursduring the year and in which you did notmaterially participate under any of theother material participation tests.

5. You materially participated in theactivity for any 5 (whether or notconsecutive) of the 10 preceding taxyears. When determining whether youmaterially participated in tax yearsbeginning before 1987 (other than a taxyear of a partnership, an S corporation,an estate, or a trust ending after 1986),you materially participated only if youparticipated for more than 500 hoursduring the tax year.

6. The activity is a personal serviceactivity in which you materially

participated for any 3 (whether or notconsecutive) preceding tax years. Whendetermining whether you materiallyparticipated for tax years beginningbefore 1987 (other than a tax year of apartnership, an S corporation, an estate,or trust ending after 1986), youmaterially participated only if youparticipated for more than 500 hoursduring the tax year.

An activity is a personal serviceactivity if it involves the performance of

personal services in the fields of health,law, engineering, architecture,accounting, actuarial science,performing arts, consulting, or any othertrade or business in which capital is nota material income-producing factor.

7. Based on all of the facts andcircumstances, you participated in theactivity on a regular, continuous, andsubstantial basis during the tax year.

You did not materially participate inthe activity under this seventh test,however, if you participated in theactivity for 100 hours or less during thetax year. Your participation in managingthe activity does not count indetermining whether you materiallyparticipated under this test if:

a. Any person (except you) receivedcompensation for performing services inthe management of the activity; or

b. Any individual spent more hoursduring the tax year than you spentperforming services in the managementof the activity (regardless of whether theindividual was compensated for themanagement services).

Special rules for limited partners.Ifyou owned your interest in an activity asa limited partner, you generally did notmaterially participate in the activity. Youdid materially participate in the activity,however, if you met materialparticipation tests 1, 5, or 6 above forthe tax year.

You are not treated as a limitedpartner for purposes of the materialparticipation tests, however, if you werea general partner in the partnership at alltimes during the partnerships tax yearending with or within your tax year (or, ifshorter, during the portion of thepartnerships tax year in which youdirectly or indirectly owned your limitedpartner interest).

Special rules for certain retired or

disabled farmers and survivingspouses of farmers.Certain retired ordisabled farmers and surviving spousesof farmers are treated as materiallyparticipating in a farming activity if thereal property used in the activity meetsthe estate tax rules for special valuationof farm property passed from aqualifying decedent. See TemporaryRegulations section 1.469-5T(h)(2).

Estates and trusts.The passiveactivity credit limitations apply to anestate or trust. See Temporary

Regulations section 1.469-1T(b)(2) and(3). Future regulations will explain how todetermine material participation for thispurpose.

Reporting Credits From theActivities

Trade or business activities withmaterial participation.If youmaterially participated in a trade orbusiness activity, the activity is not apassive activity. Report the credits from

the activity on the form you normallyuse.

Trade or business activities withoutmaterial participation.If you did notmaterially participate in a trade orbusiness activity, the activity is a passiveactivity. In general, you must useWorksheet 4 on page 11 to determinethe amount to enter on Form 8582-CRfor each trade or business activity inwhich you did not materially participate.However, if you held the activity througha PTP, special rules apply. See PubliclyTraded Partnerships (PTPs) on page 14for how to report credits from theseactivities.

Grouping Your ActivitiesCaution: At the time these instructionswere printed, former TemporaryRegulations section 1.469-4T hadexpired and final regulations defining theterm activity had not been issued. Thefollowing rules are based on ProposedRegulations section 1.469-4. When theseregulations are finalized, the IRS willannounce any changes made to theproposed rules. The proposedregulations provide that the new ruleswill be effective for tax years ending afterMay 10, 1992. For tax years ending

before May 11, 1992, former TemporaryRegulations section 1.469-4T applies.For your tax year that includes May 10,1992, the proposed regulations allowyou to follow either the new rules orformer Temporary Regulations section1.469-4T.

Generally, one or more trade orbusiness activities or rental activities aretreated as a single activity if theactivities make up an appropriateeconomic unit for the measurement ofgain or loss for purposes of the passiveactivity rules. Whether activities aretreated as a single activity depends on

all the relevant facts and circumstances.The factors given the greatest weight indetermining whether activities make upan appropriate economic unit are:

1. Similarities and differences in typesof business,

2. The extent of common control,

3. The extent of common ownership,

4. Geographical location, and

5. Interdependencies between theactivities.


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Example. You have a significantownership interest in a bakery and amovie theater in Baltimore and in abakery and a movie theater inPhiladelphia. Depending on all therelevant facts and circumstances, youcould group the movie theaters andbakeries into a single activity, into amovie theater activity and a bakeryactivity, into a Baltimore activity and aPhiladelphia activity, or into fourseparate activities.

Once you choose a grouping underthese rules, you must continue usingthat grouping in later tax years unless amaterial change in the facts andcircumstances makes it clearlyinappropriate.

The IRS may regroup your activities ifyour grouping fails to reflect one or moreappropriate economic units and one ofthe primary purposes of your grouping isto circumvent the passive activitylimitations.

Limitation on Grouping CertainActivities

The following activities may not begrouped together:

1. A rental activity with a trade orbusiness activity (unless the rentalactivity is insubstantial in relation to thetrade or business activity or vice versa),

2. An activity involving the rental ofreal property with an activity involvingthe rental of personal property (exceptfor personal property provided inconnection with the real property), or

3. Any activity with another activity inwhich you hold an interest as a limitedpartner or as a limited entrepreneur (as

defined in section 464(e)(2)), if that otheractivity engages in holding, producing,or distributing motion picture films orvideotapes; farming; leasing section1245 property; or exploring for (orexploiting) oil and gas resources orgeothermal deposits. See ProposedRegulations section 1.469-4(f) forexceptions.

Activities conducted throughpartnerships or S corporations.Oncea partnership or S corporationdetermines its activities under theserules, a partner or shareholder usesthese rules to group those activities withactivities conducted directly by the

partner or shareholder or through otherpartnerships or S corporations.

Partial disposition of an activity.Youmay treat the disposition of a substantialpart of an activity as a separate activityif you can prove with reasonablecertainty:

1. The prior year unallowed losses, ifany, allocable to that part of the activity,and

2. The net income or loss for the yearof disposition allocable to that part of

the activity.

DispositionsUnallowed passive activity credits, unlikeunallowed passive activity losses, arenot allowable when you dispose of yourinterest in an activity. However, you mayelect to increase the basis of the creditproperty by the amount of the originalbasis reduction of the property to theextent that the credit has not beenallowed by reason of the passive activityrules. No basis adjustment may beelected on a partial disposition of yourinterest in a passive activity.

Mr. Jones received a Schedule K-1 from the partnership. The low-income housing credit is shown on line 13(b)(3) of ScheduleK-1 because the property was placed in service after 1989 (post-1989 low-income housing credit).

Example of How To Complete Form 8582-CRIn 1992, John Jones purchased an interest as a limited partner in Partnership A. Mr. Jones is married and files a joint return.During 1992, the partnership placed in service a residential rental building that qualified for the low-income housing credit.

Schedule K-1:

12,000

See Partners Instructions forSchedule K-1 (Form 1065).

13a )(Credit for income tax withheld13a

Low-income housing credit:b

b(1)(1)From section 42(j)(5) partnerships for property placed in service

before 1990b(2)(2) Other than on line 13b(1) for property placed in service before 1990

Form 8586, line 5

b(3)(3)From section 42(j)(5) partnerships for property placed in service

after 1989b(4)(4) Other than on line 13b(3) for property placed in service after 1989

Qualified rehabilitation expenditures related to rental real estate

activities (see instructions)

cCredits

13c

Credits (other than credits shown on lines 13b and 13c) related

to rental real estate activities (see instructions)

dSee Partners Instructions forSchedule K-1 (Form 1065). )(13d

Credits related to other rental activities (see instructions)e 13e

Other credits (see instructions)14 14

Schedule K-1 (Form 1065) 1992For Paperwork Reduction Act Notice, see Instructions for Form 1065.

Cat. No. 11394R

Mr. Joness net passive income for 1992 is zero.


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OMB No. 1545-0984

Form 8586 Low-Income Housing CreditDepartment of the TreasuryInternal Revenue Service

AttachmentSequence No. 36b Attach to your return.

Worksheet 3 of Form 8582-CR is used for post-1989 low-income housing credits.

Step 2.Line 7 of Form 8586 asks for the passive activity credit for 1992. This amount is figured on Form 8582-CR and theworksheets.

Worksheet 3 for Lines 3a and 3b

Total. Enter on lines 3a and 3b of Form 8582-CR

(keep for your records)Prior Year

Unallowed CreditsCurrent Year

CreditsTotal Credits

FromFormName of Activity

(c) Add cols. (a) and (b)(b) Credit line 3b(a) Credit line 3a

12,0008586Partnership A

12,000

Form 8582-CR, Passive Activity Credit Limitations.

Step 1.Mr. Jones will need the following forms to report the low-income housing credit:

Mr. Jones follows the instructions for line 13(b) of Schedule K-1 and enters the employer identification number (EIN) of thepartnership and the $12,000 low-income housing credit on line 5 of Form 8586, and completes line 6.

Form 8586, Low-Income Housing Credit.

Name(s) as shown on return Identifying number

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

Number of Forms 8609 attached 12Eligible basis of building(s) (total from attached Schedule(s) A (Form 8609), line 1)23aQualified 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 precedingtax year? Yes No If Yes, enter the building identification number (BIN) of thebuilding(s) that had a decreased basis. If more space is needed, attach a schedule to list the BINs.

(iv)(iii)(ii)(i)4Credit 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 Shareholderb Partnerc 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

Part I

EIN of flow-through entity

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

123-00-4567John and Mary Jones

12,000

12,000

10 5566650


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OMB No. 1545-1034Passive Act ivity Credit LimitationsForm 8582-CR See separate instructions.

Department of the TreasuryInternal Revenue Service

AttachmentSequence No. 88a Attach to Form 1040 or 1041.

Identifying numberName(s) shown on return

1992 Passive Activity CreditsCaution: If you have credits from a publicly traded partnership, seePublicly Traded Partnerships (PTPs)on page 14

of the instructions.

Credits From Rental Real Estate Activities With Active Participation (Other Than RehabilitationCredits and Low-Income Housing Credits) (See the instructions for lines 1a through 1c onpage 9.)

1aCredits from Worksheet 1, column (a)1a

1bb Prior year unallowed credits from Worksheet 1, column (b)

1cAdd lines 1a and 1bc

Rehabilitation Credits from Rental Real Estate Activities and Low-Income Housing Credits forProperty Placed in Service Before 1990 (or From Pass-Through Interests Acquired Before 1990)(See the instructions for lines 2a through 2c on page 9.)

2a2a Credits from Worksheet 2, column (a)

2bb Prior year unallowed credits from Worksheet 2, column (b)

c Add lines 2a and 2b 2c

Low-Income Housing Credits for Property Placed in Service After 1989 (See the instructions forlines 3a through 3c on page 9.)

3aCredits from Worksheet 3, column (a)3a3bPrior year unallowed credits from Worksheet 3, column (b)b

3cAdd lines 3a and 3bcAll Other Passive Activity Credits (See the instructions for lines 4a through 4c on page 9.)

4aCredits from Worksheet 4, column (a)4a4bPrior year unallowed credits from Worksheet 4, column (b)b

4cAdd lines 4a and 4bc5Add lines 1c, 2c, 3c, and 4c56Enter the tax attributable to net passive income (see instructions)6

7 Subtract line 6 from line 5. If line 6 is more than or equal to line 5, enter -0- and see the instructions 7

Part I

Special Allowance for Low-Income Housing Credits for Property Placed in Service After 1989Note: Complete Part IV if you have an amount on line 3c. Otherwise, go to Part V.

31Enter the amount from line 19 if you completed Part III. Otherwise, subtract line 16 from line 731Enter the amount from line 3032 32

33Subtract line 32 from line 31. If zero, enter -0- here and on line 3633

Enter the smaller of line 3c or line 3334 34

35Tax attributable to the remaining special allowance (see instructions)35

Enter the smaller of line 34 or line 3536 36

Part IV

Mr. Jones follows the instructions for Worksheet 3 and enters the total credits from column (a) of that worksheet on line 3a ofForm 8582-CR. He enters the total credits on line 3c and completes lines 5 through 7 of the form. Mr. Jones can skip Parts IIand III and go to Part IV because the only credit he has is from a post-1989 low-income housing rental real estate activity. Hemust also complete the worksheet for line 35 in the instructions to get the amount to enter on line 35 of the form.

John and Mary Jones 123-00-4567

12,000

12,000

12,000

12,000

-0-

-0-12,000

12,000

12,000

7,750

7,750


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Page 8

Line 35 computation:

Line 35.Figure the tax attributable to theremaining special allowance as follows:

Note: When using taxable income in the above computation,it is not necessary to refigure items that are based on apercentage of adjusted gross income.

305,000A. Taxable income

B.

C.

D.

Tax on line A. Use tax table, tax rate schedules, orSchedule D, whichever applies 87,301

E.

Enter $25,000 ($12,500 if married filingseparate return and you and yourspouse lived apart at all times duringthe year) 25,000

F.

Enter amount from line 9 of Form 8582,if any -0-

25,000

G.

Subtract line D from line C

280,000

H.

Subtract line E from line A

I.

Tax on line F. Use tax table, tax rate schedules, orSchedule D, whichever applies 79,551

7,750

J.

Subtract line G from line B

Add lines 16 and 30 of Form 8582-CR and enterthe total -0-

Subtract line I from line H. Tax attributable to theremaining special allowance. Enter the result online 35 of Form 8582-CR 7,750

Mr. Jones completes Part V of Form 8582-CR:

7,750

Step 3.After completing Form 8582-CR, Mr. Jones determines his allowed and unallowed credit. Because he has only onetype of credit from a single passive activity, he does not need to complete Worksheets 5 through 9. His allowed low-incomehousing credit for 1992 is the amount on line 37, or $7,750. His unallowed credit of $4,250 is determined by subtracting theallowed credit on line 37 from the total credit on line 5 ($12,000 $7,750).

Passive Activity Credit Allowed

37 Passive Activity Credit Allowed. Add lines 6, 16, 30, and 36. If you have any credits from apublicly traded partnership, see Publicly Traded Partnerships (PTPs) on page 14 of theinstructions 37

Note: Use Worksheets 5 through 9, whichever apply, to allocate the allowed and unallowed credits

if you have credits from more than one passive activity. Also use the worksheets if you must

allocate the credits because they are reported on different forms.

Part V

Step 4.Mr. Jones enters the allowed passive activity credit of $7,750 on line 7 of Form 8586 and completes Part II of thatform according to the instructions for Form 8586. The unallowed credit of $4,250 is carried forward and used to figure thepassive activity credit allowed for 1993.

OMB No. 1545-0984

Form 8586 Low-Income Housing CreditDepartment of the TreasuryInternal Revenue Service

AttachmentSequence No. 36b Attach to your return.

Name(s) as shown on return Identifying number

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

Number of Forms 8609 attached 12Eligible basis of building(s) (total from attached Schedule(s) A (Form 8609), line 1)23aQualified 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 thebuilding(s) that had a decreased basis. If more space is needed, attach a schedule to list the BINs.

(iv)(iii)(ii)(i)4Credit 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 Shareholderb Partnerc 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

Part I

EIN of flow-through entity

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

123-00-4567John and Mary Jones

12,000

12,000

10 5566650

7,750


9/14

Page 9

Specific Instructions

Part I

Current Year Credits

Convert any current year qualifiedexpenditures into credits beforebeginning Worksheet 1, 2, 3, or 4.

Form 3800, General Business Credit.Enter the credits from line 2 of Form3800 in Worksheet 1, 2, 3, or 4. If thecredits are from more than one activityor more than one type of credit,separate the credits by activity or typebefore making entries in the worksheets.For example, if you have a low-incomehousing credit from one activity and aresearch credit from a different activity,enter the low-income housing credit incolumn (a) of Worksheet 2 and make aseparate entry for the research credit incolumn (a) of Worksheet 4. Any prioryear unallowed credits would be enteredin column (b) of the appropriateworksheet. Make a separate line entryfor a prior year unallowed credit if it isfrom a different activity or if it is a

different type of credit.Form 6765, Credit for IncreasingResearch Activities (or for claimingthe orphan drug credit).CompletePart I if you have an orphan drug credit.Enter the passive credit from line 4 incolumn (a) of Worksheet 4.

Form 8586, Low-Income HousingCredit.If you are not required to fileForm 3800, enter in column (a) ofWorksheet 2 or 3 the credit from line 6of Form 8586.

Form 8834, Qualified Electric VehicleCredit.Enter the passive activity creditfrom Form 8834 on Worksheet 1 or 4. If

the credits are from more than oneactivity, separate the credits by activitybefore making entries in the worksheet.

Credit for Fuel Produced from aNonconventional Source.Figure yourcredit from passive activities for fuelproduced from a nonconventional sourceand enter the credit in column (a) ofWorksheet 4.

See section 29 for more informationon the credit for fuel produced from anonconventional source.

Prior Year Unallowed Credits

In computing this years passive activity

credit, you must take into account anycredits from passive activities disallowedfor prior years and carried forward tothis year.

If you had only one type of prior yearunallowed credit from a single passiveactivity, you can figure your prior yearunallowed credit by subtracting line 37of your 1991 Form 8582-CR from line 5of your 1991 Form 8582-CR. Otherwise,your prior year unallowed credits are theamounts shown in column (b) ofWorksheet 9 in the 1991 Instructions for

Form 8582-CR. Enter the prior yearunallowed credits in column (b) ofWorksheet 1, 2, 3, or 4, whichever apply.

1992 Passive Activity Credits

Lines 1a through 1c.Individuals andqualifying estates that activelyparticipated in rental real estate activities(other than rental real estate activitieswith rehabilitation credits or low-incomehousing credits) should include thecredits from these activities on lines 1a

through 1c. Use Worksheet 1 to figurethe amounts to enter on lines 1a and 1b.

See Special Allowance for CreditsFrom Rental Real Estate Activities onpage 3.

Caution: Include the credits inWorksheet 4 and on lines 4a and 4b, butnot on lines 1a and 1b, if you weremarried filing a separate return and livedwith your spouse at any time during theyear, even if you actively participated.

Caution: You may take credits that arosein a prior tax year (other thanlow-income housing and rehabilitationcredits) under the special allowance only

if you actively participated in the rentalreal estate activity for both that prioryear and this year. If you did not activelyparticipate for both years, include thecredits in Worksheet 4 and on lines 4aand 4b, but not in Worksheet 1 or onlines 1a and 1b.

Lines 2a through 2c.Individuals,including limited partners, and qualifyingestates who had rehabilitation creditsfrom rental real estate activities orlow-income housing credits for propertyplaced in service before 1990 shouldinclude the credits from those activitieson lines 2a and 2b.

However, if you have low-incomehousing credits for property placed inservice after 1989, include those creditson lines 3a and 3b instead of lines 2aand 2b. If you held an indirect interest inthe property through a partnership,S corporation, or other pass-throughentity, use lines 3a and 3b only if youalso acquired your interest in thepass-through entity after 1989.

Caution: Include the credits inWorksheet 4 and on lines 4a and 4b, butnot on lines 2a, 2b, 3a, and 3b, if youwere married filing a separate return andlived with your spouse at any timeduring the year.

Lines 3a through 3c.Individuals,including limited partners, and qualifyingestates who had low-income housingcredits from rental real estate activitiesfor property placed in service after 1989,include those credits on lines 3a through3c instead of lines 2a through 2c. If youheld an indirect interest in the propertythrough a partnership, S corporation, orother pass-through entity, use lines 3athrough 3c only if you also acquired yourinterest in the pass-through entity after1989.

Lines 4a through 4c.Individualsshould include on lines 4a through 4ccredits from passive activities that werenot entered on lines 1a through 1c, lines2a through 2c, or lines 3a through 3c.Trusts should include credits from ALLpassive activities on lines 4a through 4c.

Line 6.If line 3 of Form 8582, PassiveActivity Loss Limitations, shows netincome, or if you did not complete Form8582 because you had net passiveincome, you will have to compute the

tax attributable to the net passiveincome. If you have an overall loss on anentire disposition of your interest in apassive activity, be sure to reduce netpassive income, if any, on line 3 of Form8582 to the extent of the loss (but notbelow zero) and use only the remainingnet passive income in the computationbelow. If you had a net passive activityloss, enter zero on line 6 and go on toline 7.

Compute the tax attributable to netpassive income as follows:A. Taxable income including net

passive income

B. Tax on line A. Use tax table, tax rate

schedules, or Schedule D, whicheverapplies

C. Taxable income without netpassive income

D. Tax on line C. Use tax table, tax rateschedules, or Schedule D, whicheverapplies

E. Subtract line D from line B and enterthe result on line 6 of Form 8582-CR

Note: When using taxable income in theabove computation, it is not necessaryto refigure items that are based on apercentage of adjusted gross income.

Line 7.If line 7 is zero because the taxattributable to net passive income online 6 is greater than your credits frompassive activities on line 5, all of your

credits from passive activities areallowed. In this case, enter the amountfrom line 5 on line 37 and report thecredits on the form you normally use. Donot complete Worksheets 5 through 9.

Part IILine 9.Married persons filing separatereturns who lived apart at all timesduring the year should enter $75,000 online 9 instead of $150,000. Marriedpersons filing separate returns who livedtogether at any time during the year arenot eligible to complete Part II.

Line 10.To figure modified adjustedgross income for this line, combine all ofthe amounts you would enter if you werefiguring adjusted gross income for yourtax return except do not take intoaccount:

Any passive activity loss,

Any taxable social security orequivalent railroad retirement benefits,

Any deductible contributions to an IRAor certain other qualified retirementplans under section 219,


10/14

Page 10

The deduction allowed under section164(f) for one-half of self-employmenttaxes, or

The exclusion from income of interestfrom series EE U.S. savings bonds usedto pay higher education expenses.

An overall loss from an entiredisposition of an interest in a passiveactivity is taken into account whenfiguring modified adjusted gross incomeif you do not have any net income aftercombining net income and losses from

all other passive activities (i.e., line 3 ofForm 8582 is a loss or zero). If you dohave net income when you combine allof the net losses and net income fromall other passive activities, the overallloss from the activity disposed of ispassive to the extent of the net incomeand nonpassive to the extent that it

exceeds the net income. Take intoaccount the nonpassive portion of theloss when figuring modified adjustedgross income.

Include any overall net income frompassive activities from publicly tradedpartnerships, any net income fromsignificant participation passiveactivities, and any other net passiveincome treated as nonpassive incomeunder Temporary Regulations section1.469-2T(f) or Regulations section

1.469-2(f).Line 12.Do not enter more than$12,500 on line 12 if you are marriedfiling a separate return and you and yourspouse lived apart at all times during theyear. Married persons filing separatereturns who lived together at any time

during the year are not eligible tocomplete Part II.

Line 15.Figure the tax attributable tothe amount on line 14 as follows:A. Taxable income

B. Tax on line A. Use tax table, tax rateschedules, or Schedule D, whicheverapplies

C. Enter amount from line Aabove

D. Enter amount from line 14 ofForm 8582-CR

E. Subtract line D from line C

F. Tax on line E. Use tax table, tax rateschedules, or Schedule D, whicheverapplies

G. Subtract line F from line B and enterthe result on line 15 of Form 8582-CR

Note: When using taxable income in theabove computation, it is not necessaryto recompute items that are based on apercentage of adjusted gross income.

Lines 1a and 1b.Use Worksheet 1 to figure the amounts to enter on lines 1a and 1b. Line 1a is used for credits from rentalreal estate activities with active participation for the current year and line 1b is used for prior year unallowed credits from rentalreal estate activities with active participation in both the prior year in which the credit arose and the current year. Seeinstructions for Special Allowance for Credits From Rental Real Estate Activities on page 3 for a definition of activeparticipation.

After you complete the worksheet below, enter the totals of columns (a) and (b) on the corresponding lines of Form 8582-CR

and then complete line 1c.Note: Rehabilitation credits from rental real estate activities and low-income housing credits should be entered in Worksheet 2 or3, whichever applies, even if you actively participated in the activity.

(keep for your records)Worksheet 1 for Lines 1a and 1bPrior Year





Totals. Enter on lines 1a and 1b of Form 8582-CR

Lines 2a and 2b.Use Worksheet 2 to figure the amounts to enter on lines 2a and 2b. Line 2a is used for rehabilitation creditsand low-income housing credits from rental real estate activities for the current year and line 2b is used for prior year unallowedcredits from those activities. However, use Worksheet 3 instead of Worksheet 2 if you have any low-income housing credits forproperty placed in service after 1989. If you held an indirect interest in the property through a partnership, S corporation, orother pass-through entity, use Worksheet 3 only if you also acquired your interest in the pass-through entity after 1989. Use thisworksheet if you do not meet both requirements.

After you complete the worksheet below, enter the totals of columns (a) and (b) on the corresponding lines of Form 8582-CRand then complete line 2c.








11/14

Page 11

Lines 3a and 3b.Use Worksheet 3 to figure the amounts to enter on lines 3a and 3b for low-income housing credits forproperty placed in service after 1989. If you held an indirect interest in the property through a partnership, S corporation, orother pass-through entity, use Worksheet 3 only if you also acquired your interest in the pass-through entity after 1989. Line 3ais used for the current year credits and line 3b is used for prior year unallowed credits for those activities.

Worksheet 3 for Lines 3a and 3b

Total. Enter on lines 3a and 3b of Form 8582-CR

After you complete the worksheet below, enter the totals of columns (a) and (b) on the corresponding lines of Form 8582-CRand then complete line 3c.

(keep for your records)Prior Year





Lines 4a and 4b.Use Worksheet 4 to figure the amounts to enter on lines 4a and 4b. Line 4a is used for credits from all otherpassive activities for the current year and line 4b is used for prior year unallowed credits from those activities.

After you complete the worksheet below, enter the totals of columns (a) and (b) on the corresponding lines of Form 8582-CRand then complete line 4c of Form 8582-CR.







Part IIILine 21.Married persons filing

separate returns who lived apart at alltimes during the year should enter$125,000 on line 21 instead of $250,000.Married persons filing separate returnswho lived together at any time duringthe year are not eligible to completePart III.

You can skip lines 21 through 26 ifyou completed Part II of this form andyour modified adjusted gross income online 10 in Part II was $100,000 or less($50,000 or less if married filingseparately and you lived apart from yourspouse for the entire year). If this wasthe case, subtract line 16 from line 15and enter the result on line 27.

Line 24.Do not enter more than$12,500 on line 24 if you are marriedfiling a separate return and you and yourspouse lived apart at all times during theyear. Married persons filing separatereturns who lived together at any timeduring the year are not eligible tocomplete Part III.

Line 27.Figure the tax attributable tothe amount on line 26 as follows:A. Taxable income

B. Tax on line A. Use tax table, tax rateschedules, or Schedule D, whicheverapplies

C. Enter amount from line Aabove

D. Enter amount from line 26 ofForm 8582-CR


F. Tax on line E. Use tax table, tax rateschedules, or Schedule D, whicheverapplies

G. Subtract line F from line B and enterthe result on line 27 of Form 8582-CR

Note: When using taxable income in theabove computation, it is not necessaryto recompute items that are based on apercentage of adjusted gross income.

Part IVNote: Married persons filing separatereturns who lived together at any timeduring the year are not eligible tocomplete Part IV.

Line 35.Figure the tax attributable tothe remaining special allowance asfollows:A. Taxable incomeB. Tax on line A. Use tax table, tax rate

schedules, or Schedule D, whicheverapplies

C. Enter $25,000($12,500 if marriedfiling separate returnand you and yourspouse lived apart atall times during theyear)

D. Enter amount fromline 9 of Form 8582,if any


F. Subtract line E from line A

G. Tax on line F. Use tax table, tax rateschedules, or Schedule D, whichever

appliesH. Subtract line G from line B

I. Add lines 16 and 30 of Form 8582-CRand enter the total

J. Subtract line I from line H. Taxattributable to the remaining specialallowance. Enter the total on line 35 ofForm 8582-CR

Note: When using taxable income in theabove computation, it is not necessaryto refigure items that are based on apercentage of adjusted gross income.


12/14

Page 12

Part V

Computation of Passive ActivityCredit Allowed

Line 37.If you have only one type ofcredit, the amount on line 37 is thecredit allowed for the year. Enter this

amount on the form where it is normallyreported. Your unallowed credit wouldbe line 5 minus line 37.

Use Worksheets 5 through 9,whichever apply, below and on page 13,to allocate the allowed and unallowedcredits if you have credits from morethan one activity. Also use the

worksheets if you must allocate thecredits because they are reported ondifferent forms.

Keep a record of each unallowedcredit and the activity to which itbelongs so you can claim the credit if itbecomes allowable in a future year.

Instructions for Worksheet 5

Complete Worksheet 5 if you have an amount on line 1c of Form 8582-CR and you have credits from more than one activity.

Column (a).Enter the credits from Worksheet 1, column (c), in column (a) of this worksheet.Column (b).Divide each of the credits shown in column (a) by the total of the credits in column (a) and enter the ratio for eachof the activities in column (b). The total of all ratios should equal 1.00.Column (c).Multiply line 16 of Form 8582-CR by the ratios in column (b) and enter the result in column (c). If the total of thiscolumn is the same as the total of column (a), all of the credits for the activities in column (a) of this worksheet are allowed.Report them on the forms you normally report them on and complete Worksheet 6 if you have credits shown in Worksheet 2.Also complete Worksheet 7 or 8 if you have credits shown in Worksheet 3 or 4. If the total of column (a) is more than the total ofcolumn (c), complete column (d).Column (d).Subtract column (c) from column (a) and enter the result in this column. Also enter the name of each activity andthe form the credit should be reported on in Worksheet 8 and enter the amount from column (d) of this worksheet in column (a)of Worksheet 8. Also complete Worksheet 6 or 7 if you have credits on line 2c or 3c of Form 8582-CR.

(keep for your records)Worksheet 5 for Credits on Line 1a or 1b

(b) Ratios(See

instructions.)

(c) SpecialAllowance (See

instructions.)

(d) Subtractcolumn (c) from

column (a)

(a) Credits (Seeinstructions.)

Form To BeReported on

Name of Activity

Totals 1.00

Instructions for Worksheet 6

Complete Worksheet 6 if you have credits on line 2c of Form 8582-CR and you have credits from more than one activity.Column (a).Enter the credits from Worksheet 2, column (c), in column (a) of this worksheet.Column (b).Divide each of the individual credits shown in column (a) by the total of all of the credits in column (a) and enterthe ratios for each of the activities in column (b). The total of all the ratios should equal 1.00.Column (c).Multiply line 30 of Form 8582-CR by the ratios in column (b) and enter the result in column (c). If the total of this column

is the same as the total of column (a), all of the credits for the activities in column (a) of this worksheet are allowed. Report them on theforms you normally report them on and complete Worksheet 7 or 8 if you have credits shown in Worksheet 3 or 4 or amounts in column(d) of Worksheet 5. If the total of column (a) is more than the total of column (c), complete column (d).

Column (d).Subtract column (c) from column (a) and enter the result in this column. Also enter the name of each activity andthe form the credit should be reported on in Worksheet 8 and enter the amount from column (d) of this worksheet in column (a)of Worksheet 8.

(keep for your records)Worksheet 6 for Credits on Line 2a or 2b

(d) Subtractcolumn (c) from

column (a)

(c) SpecialAllowance (Seeinstructions.)

(b) Ratios(See

instructions.)



Name of Activity

1.00Totals


13/14

Page 13

Instructions for Worksheet 8Complete Worksheet 8 if you have credits on line 4c of Form 8582-CR from more than one activity or reported on different

forms, or you have amounts in column (d) of Worksheets 5, 6, or 7.Column (a).Enter the amounts, if any, from column (c) of Worksheet 4 and column (d) of Worksheets 5, 6, and 7.

Column (b).Divide each of the credits in column (a) by the total of all of the credits in column (a). The total of all the ratiosshould equal 1.00.

Column (c).Complete the following computation:

A. Enter line 5 of Form 8582-CR

B. Enter line 37 of Form 8582-CR

C. Subtract line B from line A

Multiply line C by the ratios in column (b) and enter the results in column (c). Complete Worksheet 9 to determine the creditsallowed for 1992.

(keep for your records)Worksheet 8Allocation of Unallowed Credits

(c) Unallowed Credits(See instructions.)

(b) Ratios (Seeinstructions.)



Name of Activity

1.00Totals

Instructions for Worksheet 9Column (a).Enter all of the activities shown in Worksheet 8. The credits entered in column (a) of this worksheet should be thecredits shown in column (c) of Worksheets 1, 2, 3, and 4 for the activities listed in Worksheet 8.Column (b).Enter the amounts from column (c) of Worksheet 8 in this column. These are your unallowed credits for 1992.Column (c).Subtract column (b) from column (a). These are the credits allowed for 1992. The amounts in this column shouldbe reported on the forms you normally use to report the credits.

(keep for your records)Worksheet 9Allowed Credits

(c) Allowed Credits(See instructions.)

(b) Unallowed Credits(See instructions.)



Name of Activity

Totals

Instructions for Worksheet 7Complete Worksheet 7 if you have credits on line 3c of Form 8582-CR and you have credits from more than one activity.Column (a).Enter the credits from Worksheet 3, column (c), in column (a) of this worksheet.Column (b).Divide each of the individual credits shown in column (a) by the total of all of the credits in column (a) and enterthe ratios for each of the activities in column (b). The total of all the ratios should equal 1.00.Column (c).Multiply line 36 of Form 8582-CR by the ratios in column (b) and enter the result in column (c). If the total of thiscolumn is the same as the total of column (a), all of the credits for the activities in column (a) of this worksheet are allowed.Report them on the forms you normally report them on and complete Worksheet 8 if you have credits shown in Worksheet 4 oramounts in column (d) of Worksheet 5 or 6. If the total of column (a) is more than the total of column (c), complete column (d).Column (d).Subtract column (c) from column (a) and enter the result in this column. Also enter the name of each activity andthe form the credit should be reported on in Worksheet 8 and enter the amount from column (d) of this worksheet in column (a)of Worksheet 8.

(keep for your records)Worksheet 7 for Credits on Line 3a or 3b(d) Subtract

column (c) fromcolumn (a)

(c) SpecialAllowance (Seeinstructions.)

(b) Ratios(See

instructions.)



Name of Activity

1.00Totals


14/14

Page 14

Reporting Allowed Credits on YourTax Return

Form 3800.Enter on line 4 of Form3800 the total passive activity generalbusiness credit allowed from column (c)of Worksheet 9.Form 6765.Enter any allowed orphandrug credit on line 4 and identify it asPAC on Form 6765. Also completePart II of that form.Form 8586.If you are not required tofile Form 3800, enter on line 7 of Form

8586 the allowed low-income housingcredit.Form 8834.Enter any allowed qualifiedelectric vehicle credit on the appropriateline of Form 8834.Credit for fuel produced from anonconventional source.If you havean allowed passive activity credit for fuelproduced from a nonconventionalsource, see section 29 for limitationsand adjustments to the credit. Attach aseparate schedule to your tax returnshowing how you figured the credit. Ifyou have both passive and nonpassivecredits, combine the credits before

applying the limitations and adjustments.Report the credit on the line specified bythe instructions for the tax return youfile.

Publicly Traded Partnerships(PTPs)A PTP is a partnership whose interestsare traded on an established securitiesmarket or are readily traded on asecondary market (or its substantialequivalent).

An established securities marketincludes any national securitiesexchange and any local exchange

registered under the SecuritiesExchange Act of 1934 or exempted fromregistration because of the limitedvolume of transactions. It also includesany over-the-counter market.

A secondary market is generallyindicated by the existence of a personstanding ready to make a market in theinterest. An interest is treated as readilytradable if the interest is regularly quotedby persons, such as brokers or dealers,who are making a market in the interest.

The substantial equivalent of asecondary market exists where there isno identifiable market maker, but the

holder of an interest has a readilyavailable, regular, and ongoingopportunity to sell or exchange his orher interest through a public means ofobtaining or providing information ofoffers to buy, sell, or exchange interests.Similarly, the substantial equivalent of asecondary market exists where theprospective buyers and sellers have theopportunity to buy, sell, or exchangeinterests in a timeframe and with theregularity and continuity that theexistence of a market maker wouldprovide.

Credits From PTPs

A credit from a passive activity heldthrough a PTP is allowed to the extentof the tax attributable to net passiveincome from that partnership. Inaddition, rehabilitation credits andlow-income housing credits from rentalreal estate activities held through PTPsare allowed to the extent of any specialallowance that remains after taking intoaccount losses and credits from rentalreal estate activities not owned through

PTPs. See Special Allowance forCredits From Rental Real EstateActivities on page 3.

Do not enter credits from PTPs on theworksheets or on Form 8582-CR.Instead, use the following steps to figurethe allowed and unallowed credits frompassive activities held through PTPs.

Computation of Passive ActivityCredits Allowed From PTPs

Complete Steps 1 and 2 only if you havenet passive income from a PTP withpassive activity credits (including prioryear unallowed credits).

Step 1.Figure the tax attributable tonet passive income from each PTP withpassive activity credits (including prioryear unallowed credits) by following thesteps shown in the worksheet in the line6 instructions. Complete a separate taxcomputation for each PTP with netpassive income.Step 2.Passive activity credits fromeach PTP are allowed to the extent ofthe tax attributable to net passiveincome from that same PTP. Credits inexcess of the tax attributable to netpassive income may be allowed underone or more steps below.

Complete Steps 3 through 5 only if

you have rehabilitation credits fromrental real estate activities from a PTP,low-income housing credits for propertyplaced in service before 1990 from aPTP, or low-income housing credits froma PTP in which you acquired yourinterest before 1990 (regardless of thedate placed in service) (including prioryear unallowed credits).

Step 3.Reduce rehabilitation creditsfrom rental real estate activities fromeach PTP, low- income housing creditsfor property placed in service before1990 from each PTP, and anylow-income housing credits from eachPTP in which you acquired your interestbefore 1990 (regardless of the dateplaced in service) (including prior yearunallowed credits) to the extent of thetax attributable to net passive incomefrom that PTP, which was figured inStep 1.Step 4.Before beginning this step, youmust complete Form 8582-CR if youhave any passive credits that are notfrom PTPs. Subtract the total of lines 16,30, and 36, if any, of Form 8582-CR,from the amount on line 27 of Form8582-CR, to figure the tax attributable to

the special allowance available for thecredits in Step 3.

If your only passive credits are fromPTPs, complete lines 21 through 27 ofForm 8582-CR as a worksheet. Theamount on line 27 is the tax attributableto the special allowance available for thecredits in Step 3.Step 5.Rehabilitation credits fromrental real estate activities of each PTP,low-income housing credits for propertyplaced in service before 1990 by each

PTP, and any low-income housingcredits from a PTP in which youacquired your interest before 1990(regardless of the date placed in service)allowed under the special allowance arethe smaller of the total credits from Step3 or the amount figured in Step 4. IfStep 4 is smaller than Step 3, allocatethe amount in Step 4 pro rata to thecredits from each PTP in Step 3.

Complete Steps 6 through 8 only ifyou have low-income housing credits forproperty placed in service after 1989from a PTP in which you also acquiredyour interest after 1989 (including prioryear unallowed credits).

Step 6.Reduce low-income housingcredits for property placed in serviceafter 1989 from a PTP in which you alsoacquired your interest after 1989(including prior year unallowed credits)to the extent of the tax attributable tonet passive income from that PTP, whichwas figured in Step 1.Step 7.Before beginning this step, youmust complete Form 8582-CR if youhave any passive credits that are notfrom PTPs. Subtract the sum of thecredits allowed in Step 5 above and line36 of Form 8582-CR from the amounton line 35 of Form 8582-CR to figure the

tax attributable to the special allowanceavailable for the credits in Step 6.If your only passive credits are from

PTPs, complete the steps shown in theworksheet in the line 35 instructions.Subtract the credits allowed in Step 5above from the tax figured on line J ofthat worksheet. The result is the taxattributable to the special allowanceavailable for the credits in Step 6.Step 8.Low-income housing creditsallowed under the special allowance forproperty placed in service after 1989from a PTP in which you also acquiredyour interest after 1989 are the smallerof the total credits from Step 6 or the

amount figured in Step 7. If Step 7 issmaller than Step 6, allocate the amountin Step 7 pro rata to the credits fromeach PTP in Step 6.Step 9.Add Steps 2, 5, and 8. Theseare the total credits allowed frompassive activities of PTPs.Step 10.Figure the allowed andunallowed credits from each PTP. Reportthe allowed credits on the form normallyused. Keep a record of the unallowedcredits to be carried forward to 1993.

Documents

US Internal Revenue Service: i8582cr--1992