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losses from PTP passive activities on Form

Credit for employer-provided childcare

Publicly Traded

8810. Instead, use the following rules to

facilities and services.

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Partnerships (PTPs)

figure and report income, gains, deductions,

Qualified railroad track maintenance

and losses from passive activities held

credit.

A PTP is a partnership whose interests are

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through each PTP that the corporation

Biodiesel and renewable diesel fuels

traded on an established securities market

owned an interest in during the tax year.

credit.

or are readily tradable on a secondary

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Low sulfur diesel fuel production credit.

1. Combine any current year income, gains,

market (or its substantial equivalent).

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Distilled spirits credit.

deductions, and losses, and prior year

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An established securities market includes

Nonconventional source fuel credit.

unallowed losses to see if there is an overall

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any national securities exchange and any

Energy efficient home credit.

gain or loss. Include only the same types of

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local exchange registered under the

Energy efficient appliance credit.

income and losses that would be included in

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Securities Exchange Act of 1934 or

Alternative motor vehicle credit.

figuring net income or loss from a non-PTP

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exempted from registration because of the

Alternative fuel vehicle refueling property

passive activity (see Passive Activity Income

limited volume of transactions. It also

credit.

and Deductions on page 4).

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includes any over-the-counter market.

Trans-Alaska pipeline liability fund credit.

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

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Mine rescue team training credit.

A secondary market generally exists

portion (total income in excess of total

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General credits from an electing large

where a person stands ready to make a

deductions and losses) is nonpassive

partnership.

market in the interest. An interest is treated

income. Report the income, deductions, and

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Credit for alcohol used as fuel.

as readily tradable if the interest is regularly

losses on the forms and schedules normally

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Hurricane Katrina housing credit.

quoted by persons, such as brokers or

used.

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Empowerment zone and renewal

dealers, who are making a market in the

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

community employment credit.

interest.

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year in which the corporation disposed of its

American Samoa economic development

The substantial equivalent of a

entire interest in the PTP), the deductions

credit.

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secondary market exists where there is no

and losses are allowed to the extent of the

Qualified electric vehicle credit.

identifiable market maker, but holders of

income, and the excess deductions and

interests have a readily available, regular,

losses are carried forward for use in a future

Worksheet 5

and ongoing opportunity to sell or exchange

year when there is income to offset them.

Use Worksheet 5 below to figure the

interests through a public means of

Report the income and the loss allowed to

amounts to enter on lines 5a and 5b of Form

obtaining or providing information on offers

the extent of income on the form or

8810.

to buy, sell, or exchange interests. Similarly,

schedule normally used.

the substantial equivalent of a secondary

Column (a). Convert any current year

Part II. 2006 Passive

market exists where prospective buyers and

qualified expenditures into credits before

sellers have the opportunity to buy, sell, or

beginning Worksheet 5. Use the following

Activity Credits

exchange interests in a timeframe and with

forms.

the regularity and continuity that the

Use Part II of Form 8810 to figure the

Form 3800, General Business Credit.

existence of a market maker would provide.

amount of credits allowed from passive

Enter the credits from line 3 of Form 3800 in

activities for the current year and the

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

Special Instructions for PTPs

amount that is unallowed and carried

from more than one activity or more than

Section 469(k) provides that the PAL

forward. The following credits from passive

one type of credit, separate the credits by

limitations must be applied separately to

activities are included on Form 8810.

activity or type before making entries in the

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items from each PTP.

Investment credit (including the

worksheet. For example, the corporation

rehabilitation credit, energy credit, qualifying

Losses from passive activities the

has a welfare-to-work credit from one

advanced coal project credit, and qualifying

corporation holds through a PTP generally

passive activity and a disabled access credit

gasification project credit).

can be used only to offset income or gain

from a different passive activity. Enter the

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Work opportunity credit.

from passive activities of the same PTP.

welfare-to-work credit and the disabled

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Welfare-to-work credit.

Any unallowed loss from a PTP passive

access credit on separate lines in column

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Credit for increasing research activities.

activity is carried forward and allowed in a

(a) of Worksheet 5.

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Low-income housing credit.

tax year when the corporation has passive

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Form 5735, American Samoa Economic

Enhanced oil recovery credit.

income from the same PTP or when the

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Development Credit. Enter the portion of

Disabled access credit.

corporation disposes of its entire interest in

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the credit attributable to passive activities

Renewable electricity, refined coal, and

that PTP.

from line 12 of Form 5735 in column (a) of

Indian coal production credit.

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Income from passive activities the

Worksheet 5.

Indian employment credit.

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corporation holds through a PTP cannot be

Credit for employer social security and

Form 6478, Credit for Alcohol Used as

used to offset losses from passive activities

Medicare taxes paid on certain employee

Fuel. Enter the credits from line 7 of Form

the corporation holds through another PTP

tips.

6478 in column (a) of Worksheet 5. If the

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or losses from any other passive activities.

Orphan drug credit.

credits are from more than one activity,

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PAL rules for partners in PTPs. Do not

Credit for small employer pension plan

separate the credits by activity before

include any income, gains, deductions, or

startup costs.

making entries in the worksheet.

Worksheet 5 —For Form 8810, Lines 5a and 5b

(b) Prior Year

(a) Current Year

Name of Activity

From Form

Unallowed Credits

(Add Columns (a)

Credits (Line 5a)

(Line 5b)

and (b))

Totals. Enter on lines 5a and 5b of Form 8810 . . . . . . . . . . . . . . . .

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Instructions For Form 8810 - Corporate Passive Activity Loss And Credit Limitations - 2006 Page 9

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