Instructions For Form 8582-Cr - Passive Activity Credit Limitations

2. An activity involving the rental

substantially all of an activity as a

Partnership A. Mr. Jones is married

of real property with an activity

separate activity if you can prove with

and files a joint return. During 2008,

involving the rental of personal

reasonable certainty:

the partnership placed in service a

property (except personal property

residential rental building that

1. The prior year unallowed

provided in connection with the real

qualified for the low-income housing

losses, if any, allocable to the part of

property or vice versa).

credit.

the activity disposed of, and

3. Any activity with another activity

•

Mr. Jones received a Schedule K-1

2. The net income or loss for the

in a different type of business and in

(Form 1065) from the partnership.

year of disposition allocable to the

which you hold an interest as a

The low-income housing credit

part of the activity disposed of.

limited partner or as a limited

($12,000) is shown on Schedule K-1,

entrepreneur (as defined in section

box 15 with code D.

464(e)(2)), if that other activity

•

Dispositions

engages in holding, producing, or

Mr. Jones’ net passive income for

distributing motion picture films or

Unallowed PACs, unlike unallowed

2008 is zero.

videotapes; farming; leasing section

•

passive activity losses, are not

Mr. Jones will need the following

1245 property; or exploring for (or

allowed when you dispose of your

forms to figure the low income

exploiting) oil and gas resources or

interest in an activity. However, you

housing credit.

geothermal deposits.

may elect to increase the basis of the

1. Form 8586, Low-Income

credit property by the amount of the

Activities conducted through

Housing Credit (not illustrated).

original basis reduction of the

partnerships, S corporations, and

2. Form 8582-CR, Passive

property to the extent that the credit

C corporations subject to section

Activity Credit Limitations.

has not been allowed under the

469. Once a partnership or

passive activity rules. Unallowed

corporation determines its activities

Step 1. Mr. Jones follows the

PACs that are not used to increase

under these rules, a partner or

instructions for code D on Schedule

shareholder may use these rules to

the basis of the credit property are

K-1, box 15, and enters the $12,000

group those activities with:

carried forward until they are allowed.

•

low-income housing credit on line 11

Each other,

To make the election, complete Form

•

Activities conducted directly by the

of Form 8586.

8582-CR, Part VI. No basis

partner or shareholder, or

adjustment may be elected on a

•

Activities conducted through other

partial disposition of your interest in a

Step 2. Line 15 of Form 8586 asks

partnerships and corporations.

passive activity.

for the passive activity low-income

A partner or shareholder may not

housing credit for 2008. The amount

treat as separate activities those

is figured on Form 8582-CR and the

Example of How To

activities grouped together by the

worksheets. Worksheet 3 of Form

Complete Form 8582-CR

partnership or corporation.

8582-CR is used for the post-1989

Partial disposition of an activity.

In 2008, John Jones purchased an

low-income housing credits.

You may treat the disposition of

interest as a limited partner in

Worksheet 3 for Lines 3a and 3b

(keep for your records)

Current Year

Prior Year

Total Credits

Credits

Unallowed Credits

From

Name of Activity

Form

(a) Credit line 3a

(b) Credit line 3b

Partnership A

8586

12,000

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

12,000

-5-

Instructions For Form 8582-Cr - Passive Activity Credit Limitations - 2008 Page 5

Related Articles

Related forms

Related Categories