Fillable Form 8611 - Recapture Of Low-Income Housing Credit (Page 3 of 4) in pdf

Form 8611 (Rev. 12-2013)

Page

Line 2. Determine the amount to enter

Line 7. If there was a prior recapture of

Tables of interest factors to figure daily

on this line by completing a separate

accelerated credits on the building, do

compound interest were published in

Line 2 Worksheet for each prior year for

not recapture that amount again as the

Rev. Proc. 95-17, 1995-1 C.B. 556. The

which line 7 of Form 8609-A (or

result of the current reduction in qualified

interest rate in effect through December

predecessor, Schedule A (Form 8609))

basis. The example below demonstrates

31, 2013, is shown in Rev. Rul. 2013-16,

was completed.

how to incorporate into the current (Year

2013-40 I.R.B. 275. For periods after

4) recapture the first year (Year 1)

December 31, 2013, use the

Line 4. Enter the credit recapture

accelerated portion as a result of a prior

overpayment rate under section 6621(a)

percentage, expressed as a decimal

year (Year 2) recapture event.

(1) in the revenue rulings published

carried to at least 3 places, from the

quarterly in the Internal Revenue Bulletin.

Line 9. Figure the unused portion of the

table below:

accelerated amount on line 7 by:

Note. If the line 8 recapture amount is

IF the recapture

THEN

from a section 42(j)(5) partnership, the

Step 1. Totaling the credits

event occurs

enter on

partnership will figure the interest and

attributable to the building that you

in . . .

line 4 . . .

include it in the recapture amount

could not use in prior years.*

reported to you. Enter “-0-” on line 11

Years 2 through 11 .

.333

Step 2. Reducing the result of step 1

and write “Section 42(j)(5)” to the left of

by any unused credits attributable to

the entry space for line 11.

Year 12 .

.267

additions to qualified basis.

Line 13. Subtract the amount on line 9

Year 13 .

.200

Step 3. Multiplying the result of step 2

from the total of all prior year unused

by the decimal amount on line 4.

Year 14 .

.133

credits attributable to the building (Step

1 of the line 9 instruction above). Enter

Step 4. Multiplying the result of step 3

Year 15 .

.067

the result on line 13.

by the decimal amount on line 6.

Line 14. For information on how to

Line 6. Enter the percentage decrease in

Step 5. Enter the result of step 4 on

report the recapture tax on Form 1040,

qualified basis during the current year.

line 9.

see the instructions for line 60 (other

For this purpose, figure qualified basis

*Generally, this is the amount of credit reported on

taxes) in the Instructions for Form 1040.

without regard to any additions to

line 1 of this Form 8611 reduced by the total low-

Form 1120 filers report the recapture tax

qualified basis after the first year of the

income housing credits allowed on Form 8586 or

on Form 1120, Schedule J, line 9b.

credit period. Compare any decrease in

Form 3800 for each year.

Special rule for electing large

qualified basis first to additions to

Special rule for electing large

partnerships. Subtract the credit shown

qualified basis. Recapture applies only if

partnerships. Enter zero on line 9. An

on Form 8586 from the total of the line

the decrease in qualified basis exceeds

electing large partnership (defined in

14 amounts from all Forms 8611. Enter

additions to qualified basis after the first

section 775) is treated as having fully

the result (but not less than zero) on

year of the credit period.

used all prior year credits.

Form 1065-B, Part I, line 26.

If you disposed of the building or an

Line 11. Figure the interest separately

Note. You must also reduce the current

ownership interest in it and did not

for each prior tax year for which a credit

year low-income housing credit, before

satisfy the requirements for avoiding

is being recaptured. Interest must be

entering it on Schedules K and K-1, by

recapture as outlined earlier under

figured at the overpayment rate

the amount of the reduction to the total

Building dispositions, you must

determined under section 6621(a)(1) and

of the recapture amounts.

recapture all of the accelerated portion

compounded on a daily basis from the

shown on line 5. Enter 1.000 on line 6.

Line 15. Carry forward the low-income

due date (not including extensions) of

housing credit attributable to this

Note. If the decrease causes the

the return for the prior year until the

building to the next tax year. See the

qualified basis to fall below the minimum

earlier of (a) the due date (not including

Instructions for Form 3800 for details on

set-aside requirements of section 42(g)

extensions) of the return for the

how to report the carryforward of unused

(1) (the 20-50 test or the 40-60 test), then

recapture year, or (b) the date the return

credits.

100% of the amount shown on line 5

for the recapture year is filed and any

must be recaptured. Enter 1.000 on line

income tax due for that year has been

6. If you elected the 40-60 test for this

fully paid.

building and the decrease causes you to

fall below 40%, you cannot switch to the

20-50 test to meet the set-aside

requirements. You must recapture the

entire amount shown on line 5.

Line 7— Example. $2,700 of accelerated portion of low-income housing credit spread over a 10-year period and not falling below

the minimum set-asides for the building. Also, there was a 20% reduction in qualified basis in Year 2 and 30% in Year 4.

Year 1

Year 2

Year 3

Year 4*

Low-income housing

$270

$216 ($270 × .8 (20%

$270

$189 ($270 × .7 (30%

credit

reduction in qualified

basis))

Recapture of Year 1

$18 ($270 × .333 × .2

$9 ($27 ($270 × .333 ×

low-income housing

(20% reduction in

.3 (30% reduction in

credit

qualified basis))

qualified basis) minus

$18 Year 2 recapture))

* You will have to complete the rest of the form to figure the recapture as the result of the current year reduction in basis as it affects the Year 2 and Year 3 credit.

Form 8611 - Recapture Of Low-Income Housing Credit Page 3

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