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Form 8834, Qualified Electric Vehicle

Line C. Enter the net income, if any, from

Reporting Allowed Credits on

Credit. Enter the credits from line 11 of

line 1d of Form 8810. If the corporation has

Tax Return

Form 8834 in column (a) of Worksheet 5. If

an overall loss from the entire disposition of

the credits are from more than one activity,

Form 3800. Enter on line 5 of Form 3800

a passive activity, the amount to enter on

separate the credits by activity before

the total passive activity general business

line C is the net income from line 1d

making entries in the worksheet.

credit allowed from column (d) of Worksheet

reduced by the overall loss, but not below

Form 8835, Renewable Electricity,

zero. If the result is zero, skip the rest of the

Refined Coal, and Indian Coal Production

Form 5735. Enter on line 12 of Form 5735

Part I computation.

Credit. Enter the credits from Section B of

any allowed American Samoa economic

Form 8835 in column (a) of Worksheet 5. If

development credit. To the left of the entry,

Line J. If the corporation has net passive

the credits are from more than one activity,

enter “ASEDC.”

income, enter the amount from line C on this

separate the credits by activity before

Form 6478. Enter on line 9 of Form 6478

line. If the corporation has a net loss from

making entries in the worksheet.

the passive activity credit for alcohol used

line 1d of Form 8810, enter that amount on

Form 8844, Empowerment Zone and

as fuel allowed from column (d) of

line J as a negative amount.

Renewal Community Employment Credit.

Worksheet 6.

Enter the credits from line 5 of Form 8844 in

Form 8834. Enter on line 13 of Form 8834

column (a) of Worksheet 5. If the credits are

Computation for Line 7

the passive activity qualified electric vehicle

from more than one activity, separate the

credit allowed from column (d) of Worksheet

credits by activity before making entries in

Part I. Tax Attributable to Net Passive

the worksheet.

Income

Form 8835. Enter in Section B of Form

Column (b). In figuring this year’s passive

8835 the passive activity renewable

A. Income tax before credits from Form

activity credit, the corporation must take into

electricity, refined coal, and Indian coal

1120 (Schedule J, line 2) . . . . . . . . . .

account any credits from passive activities

production credit allowed from column (d) of

B. Taxable income from Form 1120

disallowed for prior years and carried

C. Net passive income. See

Worksheet 6.

forward to this year. Enter in column (b) of

instructions for line C above . . .

Form 8844. Enter on line 7 of Form 8844

Worksheet 5 the prior year unallowed

D. Subtract line C from line B. If zero

the passive activity empowerment zone and

or less, enter -0- here and on line

credits from column (c) of Worksheet 6 in

renewal community employment credit

E . . . . . . . . . . . . . . . . . . . .

the 2005 Form 8810 instructions.

allowed from column (d) of Worksheet 6.

E. Tax attributable to line D. Figure the tax

on the line D amount as if it were the

Line 7

Credits From PTPs

corporation’s only taxable income . . . . .

If any of the following apply, enter -0- on line

F. Tax attributable to net passive income.

A credit from a passive activity held through

7 and do not complete Part I or Part II of the

Subtract line E from line A. Closely held

a PTP is allowed to the extent of the tax

corporations that do not have net active

Computation for Line 7 below.

attributable to net passive income from that

•

income and personal service corporations

The corporation is a personal service

PTP. See page 9 for the definition of a PTP.

enter the amount here and on line 7 of

corporation with a loss or zero on line 1d of

Form 8810 . . . . . . . . . . . . . . . . . . .

Do not enter credits from PTPs on Form

Form 8810.

•

8810 or the worksheets. Instead, use the

The corporation is a personal service

Part II. Tax Attributable to Net Active

following steps to figure the allowed and

corporation with net passive income on line

Income

unallowed credits from passive activities

1d of Form 8810 and the corporation has an

held through PTPs.

G. Enter amount from line E if Part I is

overall loss from the entire disposition of a

completed. Otherwise, enter income tax

passive activity that is equal to or greater

1. Figure the tax attributable to net

before credits from Form 1120 (Schedule

than the net income on line 1d.

passive income for each PTP with current

•

J, line 2) . . . . . . . . . . . . . . . . . . . .

The corporation is a closely held

year passive activity credits or prior year

H. Taxable income from Form 1120

corporation with a loss or zero on line 1d of

unallowed credits.

I. Net active income . . . . . . . . .

Form 8810 and that amount is equal to or

2. Use the smaller of the tax attributable

J. Net passive income or loss. See

greater than the net active income on line 2

to net income from passive activities of the

instructions for line J above . . .

of Form 8810.

PTP or the credit (including prior year

K. Combine lines I and J. If less than

•

The corporation is a closely held

zero, enter as a negative amount

unallowed credits) from passive activities of

L. Subtract line K from line H. If zero

corporation with net income on line 3 of

the PTP as the amount allowed. Report the

or less, enter -0- here and on line

Form 8810, and the corporation has an

allowed credits on the form normally used

M . . . . . . . . . . . . . . . . . . .

overall loss from an entire disposition that is

and keep a record of the unallowed credits

M. Tax attributable to line L. Figure the tax

equal to or greater than the net income on

to be carried to the next year.

on the line L amount as if it were the

line 3.

corporation’s only taxable income . . . . .

N. Subtract line M from line G. If zero or

Computation for Line 7, Part I. This part

Part III. Election To

less, enter -0- here and on line P . . . . .

is used by personal service corporations

O. Enter the corporation’s nonpassive

Increase Basis of Credit

and closely held corporations with net

credits without regard to the tax liability

passive income.

Property

limitations . . . . . . . . . . . . . . . . . . .

P. Tax attributable to net active income.

Computation for Line 7, Part II. This part

Subtract line O from line N . . . . . . . . .

is used by closely held corporations that

Line 10

Q. Tax attributable to net passive income

have net active income. See the line 2

and net active income. Add lines F and

Check the box on this line if the corporation

instructions on page 7 for the definition of

P. Enter the result here and on line 7 of

elects to increase the basis of credit

net active income. If the corporation has

Form 8810 . . . . . . . . . . . . . . . . . . .

property it used in a passive activity or

both net passive income and net active

former passive activity by the unallowed

income, complete Part I and Part II and

Line 9

credit that reduced the property’s basis.

enter the amount from line Q on line 7 of

Form 8810.

If the corporation has one type of credit, the

The election is available for a fully

amount on line 9 is the credit allowed for the

taxable disposition of an entire interest in an

Note. When using taxable income in the

year. See Reporting Allowed Credits on Tax

activity for which a basis adjustment was

computation for line 7, it is not necessary to

made as a result of placing in service

Return below.

refigure items based on taxable income,

property for which a credit was taken. The

such as the contributions deduction,

corporation can elect to increase the basis

dividends-received deduction, and the net

Use Worksheet 6 on page 11 to figure

of the credit property immediately before the

operating loss deduction.

how much of the credit on line 9 is allowed

disposition (by an amount no greater than

for each activity. Keep a record of the

Use the applicable tax rates in section 11

the amount of the original basis reduction) to

unallowed credit and the activity to which it

when figuring the tax attributable amounts.

the extent that the credit has not previously

belongs to figure the credit allowed next

Also, see how to figure tax in the

been allowed because of the passive credit

instructions for the tax return filed.

year.

limitations. The amount of the unallowed

-10-

Instructions For Form 8810 - Corporate Passive Activity Loss And Credit Limitations - 2006 Page 10

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