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Worksheet 6

Use Worksheet 6 to allocate the allowed and unallowed credits for each activity.

Column (a). Enter the total credits from column (c) of Worksheet 5.

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

1.00.

Column (c). Multiply line 8 of Form 8810 by the ratios in column (b) and enter the results in column (c). These are the

unallowed credits for 2001. Keep a record of these amounts, so the credits can be carried to the next year.

Column (d). Subtract column (c) from column (a). These are the allowed credits for 2001. The amounts in this column should

be reported on the forms normally used. See Reporting Allowed Credits on Tax Return below.

Worksheet 6—Allowed and Unallowed Credits

Form To Be

Name of activity

(a) Credits

(b) Ratio

(d) Allowed Credits

Reported on

Totals

1.00

Reporting Allowed Credits on

allowed and unallowed credits from

or if the disposition is not fully taxable.

passive activities held through PTPs:

The amount of any unallowed credit,

Tax Return

however, remains available to offset the

1. Figure the tax attributable to net

Form 3800. Enter on line 5 of Form 3800

tax attributable to net passive and net

passive income for each PTP with current

the total passive activity general business

active income.

year passive activity credits or prior year

credit allowed from column (d) of

unallowed credits.

Worksheet 6.

2. Use the smaller of the tax

Paperwork Reduction Act Notice. We

Form 5735. Enter on line 17 or line 27 of

attributable to net income from passive

ask for the information on this form to

Form 5735 any allowed possessions

activities of the PTP or the credit

carry out the Internal Revenue laws of the

corporation tax credit. To the left of the

(including prior year unallowed credits)

United States. You are required to give us

entry, write “PAC.”

from passive activities of the PTP as the

the information. We need it to ensure that

Form 8586. If the corporation is not

amount allowed. Report the allowed

you are complying with these laws and to

required to file Form 3800, enter on line 7

credits on the form normally used and

allow us to figure and collect the right

of Form 8586 any allowed low-income

keep a record of the unallowed credits to

amount of tax.

housing credit.

be carried to the next year.

You are not required to provide the

Form 8834. Enter on line 12 of Form

information requested on a form that is

8834 the passive activity qualified electric

Part III—Election To

subject to the Paperwork Reduction Act

vehicle credit allowed from column (d) of

unless the form displays a valid OMB

Increase Basis of Credit

Worksheet 6.

control number. Books or records relating

Form 8844. Enter on line 7 of Form 8844

Property

to a form or its instructions must be

the passive activity empowerment zone

retained as long as their contents may

Line 10. Check the box on this line if the

employment credit allowed from column

become material in the administration of

corporation elects to increase the basis of

(d) of Worksheet 6.

any Internal Revenue law. Generally, tax

credit property it used in a passive activity

returns and return information are

Nonconventional source fuel credit. If

or former passive activity by the

confidential, as required by section 6103.

the corporation has an allowed passive

unallowed credit that reduced the

activity credit for fuel produced from a

The time needed to complete and file

property’s basis.

nonconventional source, see section 29

this form will vary depending on individual

The election is available for a fully

for limitations and adjustments to the

circumstances. The estimated average

taxable disposition of an entire interest in

credit. Attach a separate schedule to the

time is:

an activity for which a basis adjustment

tax return showing how the credit was

was made as a result of placing in service

figured. Combine any nonpassive credits

Recordkeeping . . . . . .

26 hr., 19 min.

property for which a credit was taken. The

for fuel from a nonconventional source

corporation may elect to increase the

Learning about the law

with the passive activity credit before

basis of the credit property immediately

or the form . . . . . . . . .

5 hr., 7 min.

applying the limitations and adjustments.

before the disposition (by an amount no

Report the credit on the line specified by

Preparing and sending

greater than the amount of the original

the instructions for the tax return being

the form to the IRS . . .

5 hr., 43 min.

basis reduction) to the extent that the

filed.

credit has not previously been allowed

If you have comments concerning the

Credits From PTPs

because of the passive credit limitations.

accuracy of these time estimates or

A credit from a passive activity held

The amount of the unallowed credit that

suggestions for making this form simpler,

through a PTP is allowed to the extent of

may then be applied against tax is

we would be happy to hear from you. See

the tax attributable to net passive income

reduced by the amount of the basis

the instructions for the tax return with

from that PTP. See page 10 for the

adjustment.

which this form is filed.

definition of a PTP.

No basis adjustment may be elected

Do not enter credits from PTPs on

on a partial disposition of the

Form 8810 or the worksheets. Instead,

corporation’s interest in a passive activity

use the following steps to figure the

-12-

Instructions For Form 8810 Corporate Passive Activity Loss And Credit Limitations - Department Of The Treasury Page 12

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