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

Step 5 — Low-income housing credits for

property placed in service before 1990 by each

PTP, and any low-income housing credits from a

PTP in which you acquired your interest before

1990 (regardless of the date placed in service)

allowed under the $75,000 special allowance are

the smaller of the total credits from Step 3 or the

amount figured in Step 4. If Step 4 is smaller

than Step 3, allocate the amount in Step 4 pro

rata to the credits from each PTP in Step 3.

Complete Step 6 through Step 8 only if you have

low-income housing credits for property placed in

service after 1989 from a PTP in which you also

acquired your interest after 1989.

Step 6 — Reduce low-income housing credits

for property placed in service after 1989 from a

PTP in which you also acquired your interest

after 1989 to the extent of the tax attributable to

net passive income from that PTP, which was

figured in Step 1.

Step 7 — Before beginning this step, you must

complete form FTB 3801-CR if you have any

passive credits that are not from PTPs. Subtract

the sum of the credits allowed in Step 5 above

and line 36 of form FTB 3801-CR from the

amount on line 35 of form FTB 3801-CR to figure

the tax attributable to the $75,000 special

allowance available for the credits in Step 6.

If your only passive credits are from PTPs,

complete the steps shown in the worksheet in

the line 35 instructions. Subtract the credits

allowed in Step 5 above from the tax figured on

line J of that worksheet. The result is the tax

attributable to the $75,000 special allowance

available for the credits in Step 6.

Step 8 — Low-income housing credits allowed

under the $75,000 special allowance for

property placed in service after 1989 from a PTP

in which you also acquired your interest after

1989, are the smaller of the total credits from

Step 6 or the amount figured in Step 7. If Step 7

is smaller than Step 6, allocate the amount in

Step 7 pro rata to the credits from each PTP in

Step 6.

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

credits allowed from passive activities of PTPs.

Step 10 — Figure the allowed and unallowed

credits from each PTP. Report the allowed

credits on the appropriate credit form. Keep a

record of the unallowed credits for use in a

future year.

Part VI

Election to Increase Basis of Credit Property

Complete Part VI if you disposed of your entire

interest in a passive activity or former passive

activity in a fully taxable transaction and you

elect to increase the basis of the credit property

used in that activity by the unallowed credit that

reduced the property’s basis.

Page 4 FTB 3801-CR Instructions 2004

Instructions For Form Ftb 3801-Cr - Passive Activity Credit Limitations - 2004 Page 4

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