Instructions For Form Ftb 3801-Cr - Passive Activity Credit Limitations

Part VI

Do not enter credits from PTPs on the

Step 5 — Low-income housing credits for

worksheets or on form FTB 3801-CR. Instead,

property placed in service before 1990 by each

Election to Increase Basis of Credit Property

use the following steps to compute the allowed

PTP, and any low-income housing credits from

Complete Part VI if you disposed of your

and unallowed credits from passive activities

a PTP in which you acquired your interest

entire interest in a passive activity or former

held through PTPs.

before 1990 (regardless of the date placed in

passive activity in a fully taxable transaction

service) allowed under the $75,000 special

Computation of Passive Activity Credits

and you elect to increase the basis of the credit

allowance are the smaller of the total credits

Allowed for PTPs

property used in that activity by the unallowed

from Step 3 or the amount figured in Step 4.

Complete Step 1 and Step 2 only if you have

credit that reduced the property’s basis.

If Step 4 is smaller than Step 3, allocate the

net passive income from a PTP with passive

amount in Step 4 pro rata to the credits from

activity credits.

each PTP in Step 3.

In the following instructions, the term “credits”

Complete Step 6 through Step 8 only if you

includes current year credits and prior year

have low-income housing credits for property

unallowed credits.

placed in service after 1989 from a PTP in

Step 1 — Figure the tax attributable to net

which you also acquired your interest after

passive income from each PTP with passive

1989.

activity credits by following the steps shown

Step 6 — Reduce low-income housing credits

in the worksheet in the line 6 instructions.

for property placed in service after 1989 from

Complete a separate tax computation for each

a PTP in which you also acquired your interest

PTP with net passive income.

after 1989 to the extent of the tax attributable

Step 2 — Passive activity credits from

to net passive income from that PTP, which

each PTP are allowed to the extent of the

was figured in Step 1.

tax attributable to net passive income from

Step 7 — Before beginning this step, you

that same PTP. Credits in excess of the tax

must complete form FTB 3801-CR if you

attributable to net passive income may be

have any passive credits that are not from

allowed under one or more steps below.

PTPs. Subtract the sum of the credits

Complete Step 3 through Step 5 only if you

allowed in Step 5 above and line 36 of form

have low-income housing credits for property

FTB 3801-CR from the amount on line 35 of

placed in service before 1990 from a PTP, or

form FTB 3801-CR to figure the tax attributable

low-income housing credits from a PTP in

to the $75,000 special allowance available for

which you acquired your interest before 1990

the credits in Step 6.

(regardless of the date placed in service).

If your only passive credits are from PTPs,

Step 3 — Reduce low-income housing credits

complete the steps shown in the worksheet in

for property placed in service before 1990

the line 35 instructions. Subtract the credits

from each PTP, and any low-income housing

allowed in Step 5 above from the tax figured

credits from each PTP in which you acquired

on line J of that worksheet. The result is the tax

your interest before 1990 (regardless of the

attributable to the $75,000 special allowance

date placed in service) to the extent of the tax

available for the credits in Step 6.

attributable to net passive income from that

Step 8 — Low-income housing credits allowed

PTP, which was figured in Step 1.

under the $75,000 special allowance for

Step 4 — Before beginning this step, you

property placed in service after 1989 from a

must complete form FTB 3801-CR if you have

PTP in which you also acquired your interest

any passive credits that are not from PTPs.

after 1989, are the smaller of the total credits

Subtract the sum of form FTB 3801-CR,

from Step 6 or the amount figured in Step 7.

line 16, line 30, and line 36 (if any) from

If Step 7 is smaller than Step 6, allocate the

form FTB 3801-CR, line 27 to figure the tax

amount in Step 7 pro rata to the credits from

attributable to the $75,000 special allowance

each PTP in Step 6.

available for the credits in Step 3.

Step 9 — Add Steps 2, 5, and 8. These are the

If your only passive credits are from PTPs,

credits allowed from passive activities of PTPs.

complete form FTB 3801-CR, line 21 through

Step 10 — Figure the allowed and unallowed

line 27 as a worksheet. The amount on line 27

credits from each PTP. Report the allowed

is the tax attributable to the $75,000 special

credits on the appropriate credit form. Keep

allowance available for the credits in Step 3.

a record of the unallowed credits for use in a

future year.

Page 4 FTB 3801-CR Instructions 2014

Instructions For Form Ftb 3801-Cr - Passive Activity Credit Limitations - 2014 Page 4

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