Instructions For Form 8582-Cr - Passive Activity Credit Limitations

Line 35 computation:

Line 35. Figure the tax attributable to the remaining special allowance as follows:

305,000

A. Taxable income

Tax on line A. For Form 1040, use the Tax Table, Tax Computation Worksheet, or other appropriate method you used to figure

79,379

your tax. For Form 1041, use the Tax Rate Schedules, the Qualified Dividends Tax Worksheet, or Schedule D whichever applies

Enter $25,000 ($12,500 if married filing separate return and you and your spouse lived apart at

25,000

all times during the year)

-0-

Enter amount, if any, from Form 8582, line 10

-0-

Enter amount, if any, from Form 8582, line 14

25,000

Subtract lines D and E from line C

280,000

Subtract line F from line A

Tax on line G. For Form 1040, use the Tax Table, Tax Computation Worksheet, or other appropriate method you used to figure

71,129

your tax. For Form 1041, use the Tax Rate Schedules, the Qualified Dividends Tax Worksheet, or Schedule D whichever applies

8,250

Subtract line H from line B

-0-

Add lines 16 and 30 of Form 8582-CR and enter the total

8,250

Tax attributable to the remaining special allowance. Subtract line J from line I. Enter the result on Form 8582-CR, line 35

Note: When using taxable income in the above computation, it is not necessary to refigure items that are based on a percentage

of adjusted gross income.

Step 4. Mr. Jones completes Form 8582-CR, Part V.

Part V

Passive Activity Credit Allowed

37 Passive Activity Credit Allowed. Add lines 6, 16, 30, and 36. See page 13 to find out how to

report the allowed credit on your tax return and how to allocate allowed and unallowed credits

if you have more than one credit or credits from more than one activity. If you have any credits

from a publicly traded partnership, see Publicly Traded Partnerships (PTPs) on page 14

8,250

Step 5. After completing Form 8582-CR, Mr. Jones determines his allowed and unallowed credit. Because he has only one type of

credit from a single passive activity, his allowed low-income housing credit for 2008 is the amount on line 37, or $8,250. His unallowed

credit of $3,750 is determined by subtracting the allowed credit on line 37 from the total credit on line 5 ($12,000 – $8,250).

Step 6. Mr. Jones enters the allowed passive activity credit of $8,250 on Form 8586, line 15, and completes Part II of that form

according to the instructions for Form 8586. The unallowed credit of $3,750 is carried forward and used to figure the passive activity

credit allowed for 2009.

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Instructions For Form 8582-Cr - Passive Activity Credit Limitations - 2008 Page 7