Instructions For Form 8810 (2015) (Page 6 of 14) in pdf

taxable transaction is a transaction in which

Note. Members of a consolidated group,

Losses from dispositions of property that

produce portfolio income or property held for

all the realized gain or loss is recognized.

see Regulations section 1.469-1(h)(6) and

Temporary Regulations sections 1.469-1T(h)

investment.

If the corporation is using the installment

(7) and (8) for rules on applying the PAL

State, local, and foreign income taxes.

method to report this kind of disposition,

rules to dispositions of property and other

Charitable contribution deductions.

figure the loss for the current year that is not

intercompany transactions.

Net operating loss deductions, percentage

limited by the PAL rules by multiplying the

depletion carryovers under section 613A(d),

corporation's overall loss (which does not

and capital loss carrybacks and carryovers.

Specific Instructions

include losses allowed in prior years) by the

Deductions and losses that would have

following fraction.

Note. Complete Worksheets 1 and 2 before

been allowed for tax years beginning before

completing Form 8810, Part I.

1987, but for basis or at-risk limitations.

Gain recognized in the current year

Net negative section 481 adjustments

Worksheet 1

allocated to activities other than passive

Unrecognized gain as of the beginning

Use Worksheet 1 to figure the total current

activities. See Temporary Regulations

of the current year

year income, gains, deductions, and losses

section 1.469-2T(d)(7).

for each passive activity.

Deductions for losses from fire, storm,

shipwreck, or other casualty, or from theft, if

Lines 1 through 4. Enter on these lines the

Unallowed passive activity credits, unlike

losses similar in cause and severity do not

gross receipts and other income from

unallowed PALs, are not allowable when the

regularly recur in the activity.

passive activities and passive activity gains

corporation disposes of its interest in an

reported on Schedule D (Form 1120) and

activity. However, the corporation can elect

Former Passive Activities

Form 8949, as applicable, and Form 4797,

to increase the basis of the credit property by

Sales of Business Property.

A former passive activity is any activity that

the amount of the original basis reduction of

was a passive activity in a prior tax year but

the property to the extent that the credit has

Line 5. Enter total income on this line and in

is not a passive activity in the current tax

not been allowed under the passive activity

Worksheet 2, column (a).

year. A prior year unallowed loss from a

rules. Unallowed passive activity credits that

Lines 6a through 6l. Enter passive activity

former passive activity is allowed to the

are not used to increase the basis of the

deductions.

extent of current year income from the

credit property are carried forward until they

activity. The following apply.

are allowed. To make the election, complete

Lines 8 and 9. Enter on line 8 losses from

If the current year net income from the

Part III of Form 8810. No basis adjustment

passive activities reported on Schedule D

activity is less than the prior year unallowed

can be elected on a partial disposition of the

(Form 1120) and Form 8949, as applicable.

loss, enter the prior year unallowed loss and

corporation's interest in a passive activity.

Enter on line 9 losses from passive activities

any current year net income from the activity

reported on Form 4797.

A partner in a PTP is not treated as

on Form 8810 and the applicable

having disposed of an entire interest in an

Line 10. Enter total deductions and losses

worksheets.

activity of a PTP until there is an entire

on this line and in Worksheet 2, column (b).

If the current year net income from the

disposition of the partner's interest in the

Gross receipts, gains from the sale of

activity is more than or equal to the prior year

PTP.

business assets, capital gains, and other

unallowed loss from the activity, report the

passive income should also be entered on

income and loss on the forms and schedules

Reporting an Entire Disposition

the forms and schedules normally used.

normally used; do not enter the amounts on

When the corporation completely disposes

Allowable passive activity deductions and

Form 8810.

of an entire interest in a passive activity or a

losses are entered on the forms and

If the activity has a net loss for the current

former passive activity, there may be net

schedules after Form 8810 is completed and

year, enter the prior year unallowed loss (but

income or loss and prior year unallowed

the deductions and losses are allocated to

not the current year loss) on Form 8810 and

losses from the activity. All the income,

the activities.

the applicable worksheets.

gains, deductions, and losses are reported

Worksheet 2

For rules about prior year unallowed

on the forms and schedules normally used.

credits from former passive activities, see

Columns (a) and (b). Enter in column (a)

Combine all income, gains, deductions,

section 469(f). To report a disposition of a

the total income for the current year shown

and losses (including any prior year

former passive activity, follow the rules under

on Worksheet 1, line 5. Enter in column (b)

unallowed losses) from the activity for the tax

Dispositions below.

the total deductions and losses shown in

year to see if the corporation has an overall

Worksheet 1, line 10 .

Dispositions

gain or loss.

Column (c). Enter the prior year unallowed

If the corporation has an overall gain from

Disposition of Less Than an

losses from Worksheet 4, column (c),

a passive activity and also has other passive

located in the 2014 Instructions for Form

Entire Interest

activities to report on Form 8810, include the

8810.

income, gains, deductions, and losses

Gains and losses from the disposition of less

(including prior year unallowed losses) on

Totals. Enter the totals from Worksheet 2,

than an entire interest in an activity are

columns (a), (b), and (c) on Form 8810, lines

Worksheet 1. If this is the corporation's only

treated as part of the net income or net loss

passive activity or a former passive activity,

1a, 1b, and 1c.

from the activity for the current year.

report the income, gains, deductions, and

Columns (d) and (e). Combine income,

losses (including prior year unallowed

Note. A disposition of less than substantially

deductions, and losses in columns (a)

losses) on the forms and schedules normally

all of an entire interest does not trigger the

through (c) for each activity. Enter any

used, but do not enter them on the

allowance of prior year unallowed losses.

overall gain in column (d) or any overall loss

worksheets or on Form 8810.

in column (e). Do not enter the amounts from

Disposition of an Entire Interest

columns (d) and (e) on Form 8810. These

If the corporation has an overall loss

If the corporation disposed of its entire

amounts will be used when Form 8810 is

when combining all income, gains,

interest in a passive activity or a former

completed to figure the loss allowed for the

deductions, and losses (including any prior

passive activity to an unrelated party in a

current year.

year unallowed losses) from the activity,

fully taxable transaction during the tax year,

report all the income, gains, deductions, and

the losses allocable to the activity for the

losses on the forms and schedules normally

year are not limited by the PAL rules. A fully

used, but do not enter them on the

worksheets or on Form 8810.

Instructions for Form 8810 (2015)

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Instructions For Form 8810 (2015) Page 6

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