Looking for a Form 8810 Templates? Download it for free!

Publicly Traded

included in figuring net income or loss

in column (a) of Worksheet 5. If the

from a non-PTP passive activity (see

credits are from more than one activity or

Partnerships (PTPs)

Passive Activity Income and

more than one type of credit, separate the

Deductions on page 5).

credits by activity or type before making

A PTP is a partnership whose interests

entries in the worksheet. For example, the

are traded on an established securities

2. If there is an overall gain, the net gain

corporation has a welfare-to-work credit

market or are readily tradable on a

portion (total income in excess of total

from one passive activity and a disabled

secondary market (or its substantial

deductions and losses) is nonpassive

access credit from a different passive

equivalent).

income. Report the income, deductions,

activity. Enter the welfare-to-work credit

and losses on the forms and schedules

An established securities market

and the disabled access credit on

normally used.

includes any national securities exchange

separate lines in column (a) of Worksheet

and any local exchange registered under

3. If there is an overall loss (other than in

the Securities Exchange Act of 1934 or

a year in which the corporation disposed

Form 5735, Possessions Corporation

exempted from registration because of

of its entire interest in the PTP), the

Tax Credit. Enter the portion of the credit

the limited volume of transactions. It also

deductions and losses are allowed to the

attributable to passive activities from line

includes any over-the-counter market.

extent of the income, and the excess

17 or line 27 of Form 5735 in column (a)

deductions and losses are carried forward

A secondary market generally exists

of Worksheet 5.

for use in a future year when there is

where a person stands ready to make a

income to offset them. Report the income

Form 8586, Low-Income Housing

market in the interest. An interest is

and the loss allowed to the extent of

Credit. If the corporation is not required

treated as readily tradable if the interest is

income on the form or schedule normally

to file Form 3800, enter the portion of the

regularly quoted by persons, such as

used.

credit attributable to passive activities

brokers or dealers, who are making a

from line 6 of Form 8586 in column (a) of

market in the interest.

Part II—2002 Passive

Worksheet 5.

The substantial equivalent of a

Activity Credits

Form 8834, Qualified Electric Vehicle

secondary market exists where there is

Credit. Enter the credits from line 11 of

no identifiable market maker, but holders

Use Part II of Form 8810 to figure the

Form 8834 in column (a) of Worksheet 5.

of interests have a readily available,

amount of credits allowed from passive

If the credits are from more than one

regular, and ongoing opportunity to sell or

activities for the current year and the

activity, separate the credits by activity

exchange interests through a public

amount that is unallowed and carried

before making entries in the worksheet.

means of obtaining or providing

forward. The following credits from

information on offers to buy, sell, or

Form 8844, Empowerment Zone and

passive activities are included on Form

exchange interests. Similarly, the

Renewal Community Employment

8810.

•

substantial equivalent of a secondary

Credit. Enter the credits from line 5 of

Investment credit (including the

market exists where prospective buyers

Form 8844 in column (a) of Worksheet 5.

rehabilitation credit, energy credit, and

and sellers have the opportunity to buy,

If the credits are from more than one

reforestation credit).

•

sell, or exchange interests in a timeframe

activity, separate the credits by activity

Work opportunity credit.

•

and with the regularity and continuity that

before making entries in the worksheet.

Welfare-to-work credit.

•

the existence of a market maker would

Credit for alcohol used as fuel.

Form 8884, New York Liberty Zone

•

provide.

Credit for increasing research activities.

Business Employee Credit. Enter the

•

Low-income housing credit.

credits from line 5 of Form 8884 in

Special Instructions for PTPs

•

Enhanced oil recovery credit.

column (a) of Worksheet 5. If the credits

Section 469(k) provides that the passive

•

Disabled access credit.

are from more than one activity, separate

activity limitations must be applied

•

Renewable electricity production credit.

the credits by activity before making

separately to items from each PTP.

•

Indian employment credit.

entries in the worksheet.

•

Losses from passive activities the

Credit for employer social security and

Nonconventional source fuel credit.

corporation holds through a PTP

Medicare taxes paid on certain employee

Figure the credit from passive activities

generally can be used only to offset

tips.

for fuel produced from a nonconventional

•

income or gain from passive activities of

Orphan drug credit.

source and enter the credit in column (a)

•

the same PTP. Any unallowed loss from a

Credit for small employer pension plan

of Worksheet 5. See section 29 for more

PTP passive activity is carried forward

startup costs.

information on the credit for fuel produced

•

and allowed in a tax year when the

Credit for employer-provided child care

from a nonconventional source.

corporation has passive income from the

facilities and services.

•

Column (b). In figuring this year’s

same PTP or when the corporation

Empowerment zone and renewal

passive activity credit, the corporation

disposes of its entire interest in that PTP.

community employment credit.

•

must take into account any credits from

New York Liberty Zone business

Income from passive activities the

passive activities disallowed for prior

employee credit.

corporation holds through a PTP cannot

•

years and carried forward to this year.

Trans-Alaska pipeline liability fund

be used to offset losses from passive

Enter in column (b) of Worksheet 5 the

credit.

activities the corporation holds through

•

prior year unallowed credits from column

General credits from an electing large

another PTP or losses from any other

partnership.

passive activities.

•

instructions.

Possessions corporation tax credit.

Passive activity loss rules for partners

•

Line 7. If any of the following apply, enter

Qualified electric vehicle credit.

in PTPs. Do not include any income,

•

zero on line 7 and do not complete Part I

Nonconventional source fuel credit.

gains, deductions, or losses from PTP

or Part II of the Computation for Line 7

passive activities on Form 8810. Instead,

Worksheet 5

on page 11.

•

use the following rules to figure and report

The corporation is a personal service

Use Worksheet 5 on page 11 to figure the

income, gains, deductions, and losses

corporation with a loss or zero on line 1d

amounts to enter on lines 5a and 5b of

from passive activities held through each

of Form 8810.

Form 8810.

•

PTP that the corporation owned an

The corporation is a personal service

interest in during the tax year:

Column (a). Convert any current year

corporation with net passive income on

qualified expenditures into credits before

1. Combine any current year income,

line 1d of Form 8810 and the corporation

beginning Worksheet 5. Use the following

gains, deductions, and losses, and prior

has an overall loss from the entire

forms.

year unallowed losses to see if there is an

disposition of a passive activity that is

overall gain or loss. Include only the same

Form 3800, General Business Credit.

equal to or greater than the net income on

types of income and losses that would be

Enter the credits from line 3 of Form 3800

line 1d.

-10-

Instructions For Form 8810 - Corporate Passive Activity Loss And Credit Limitations - 2002 Page 10

Related Articles

Related forms

Related Categories