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Worksheet 5—For Form 8810, Lines 5a and 5b

(b) Prior Year

(a) Current Year

Name of activity

From Form

Unallowed Credits

(add columns (a)

Credits (line 5a)

(line 5b)

and (b))

Totals. Enter on lines 5a and 5b of Form 8810

is equal to or greater than the net income

C. Net passive income. See instructions

Line C. Enter the net income, if any, from

for line C below . . . . . . . . . . . . . .

on line 3.

line 1d of Form 8810. If the corporation

D. Subtract line C from line B. If zero or

Part I of the Computation for Line 7

has an overall loss from the entire

less, enter -0- here and on line E below

E. Tax attributable to line D. Figure the tax on the

below is used by personal service

disposition of a passive activity, the

line D amount as if it were the corporation’s only

corporations and closely held

amount to enter on line C is the net

taxable income . . . . . . . . . . . . . . . . . . .

corporations with net passive income.

income from line 1d reduced by the

F. Tax attributable to net passive income.

Subtract line E from line A. Closely held

overall loss, but not below zero. If the

Part II is used by closely held

corporations that do not have net active income

result is zero, skip the rest of the Part I

corporations that have net active income.

and personal service corporations enter the

computation.

amount here and on line 7 of Form 8810 . . . .

See the line 2 instructions on page 8 for

the definition of net active income. If the

Line J. If the corporation has net passive

Part II — Tax Attributable to Net Active

income, enter the amount from line C on

corporation has both net passive income

Income

this line. If the corporation has a net loss

and net active income, complete Part I

from line 1d of Form 8810, enter that

and Part II and enter the amount from line

G. Enter amount from line E if Part I is completed.

Otherwise, enter income tax before credits from

amount on line J as a negative amount.

Q on line 7 of Form 8810.

Form 1120 (Schedule J, line 3) . . . . . . . . . .

Line 9. If the corporation has one type of

Note: When using taxable income in the

H. Taxable income from Form 1120 . . . .

I. Net active income . . . . . . . . . . . .

credit, the amount on line 9 is the credit

computation for line 7, it is not necessary

J. Net passive income or loss. See

to refigure items based on taxable

allowed for the year. See Reporting

instructions for line J below . . . . . . .

Allowed Credits on Tax Return on page

income, such as the contributions

K. Add lines I and J. If less than -0-, enter

as a negative amount . . . . . . . . . .

12.

deduction, dividends-received deduction,

L. Subtract line K from line H. If zero or

and the net operating loss deduction.

Use Worksheet 6 on page 12 to figure

less, enter -0- here and on line M below

M. Tax attributable to line L. Figure the tax on the

how much of the credit on line 9 is

Use the applicable tax rates in section

line L amount as if it were the corporation’s only

allowed for each activity. Keep a record of

11 when figuring the tax attributable

taxable income . . . . . . . . . . . . . . . . . . .

the unallowed credit and the activity to

amounts. Also, see how to figure tax in

N. Subtract line M from line G. If zero or less, enter

-0- here and on line P . . . . . . . . . . . . . . .

which it belongs to figure the credit

the instructions for the tax return filed.

O. Enter the corporation’s nonpassive credits

allowed next year.

without regard to the tax liability limitations . . .

Computation for Line 7

P. Tax attributable to net active income. Subtract

line O from line N . . . . . . . . . . . . . . . . .

Part I — Tax Attributable to Net Passive

Q. Tax attributable to net passive income and

Income

net active income. Add lines F and P. Enter the

result here and on line 7 of Form 8810 . . . . . .

A. Income tax before credits from Form 1120

(Schedule J, line 3) . . . . . . . . . . . . . . . .

B. Taxable income from Form 1120 . . . .

-11-

Instructions For Form 8810 Corporate Passive Activity Loss And Credit Limitations - Department Of The Treasury Page 11

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