Instructions For Form 8810 - 2016 Page 11

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Keep for Your Records
Worksheet 5—For Form 8810, Lines 5a and 5b
(b) Prior Year
(c) Total Credits
(a) Current Year
Name of Activity
From Form
Unallowed Credits
(Add Columns (a)
Credits (Line 5a)
(Line 5b)
and (b))
Totals. Enter on Form 8810, lines 5a and 5b . . . . . . . . . . . . . . . . . . .
Computation for Line 7
that will not be allocated to patrons. Credits
M. Tax attributable to line L. Figure the
that are being allocated to patrons should be
tax on the line L amount as if it were
Part I. Tax Attributable to Net
picked up from the separate credit forms.
the corporation's only taxable
income
Passive Income
. . . . . . . . . . . . . . . .
Column (b). In figuring this year's passive
N. Subtract line M from line G. If zero or
activity credit, the corporation must take into
less, enter -0- here and on line
account any credits from passive activities
A. Income tax before credits from Form
P
. . . . . . . . . . . . . . . . . . .
disallowed for prior years and carried
1120 (Schedule J, line 2)
. . . . . .
O. Enter the corporation's nonpassive
B. Taxable income from Form
forward to this year adjusted, if required, for
credits without regard to the tax
1120
items such as recaptured credits (see
. . . . . . . . . . . . .
liability limitations
. . . . . . . . . .
C. Net passive income. See
P. Tax attributable to net active income.
Regulations section 1.469-3(f)). Enter in
instructions for line C
Subtract line O from line N
. . . .
Worksheet 5, column (b), the prior year
. . . . .
D. Subtract line C from line B. If
Q. Tax attributable to net passive
unallowed credits from Worksheet 6, column
zero or less, enter -0- here and
income and net active income. Add
(c), located in the 2015 Instructions for Form
on line E
. . . . . . . . . . .
lines F and P. Enter the result here
8810 (adjusted if required).
E. Tax attributable to line D. Figure the
and on Form 8810, line 7
. . . . . .
For rules about prior year unallowed
tax on the line D amount as if it were
credits from former passive activities, see
the corporation's only taxable
income
section 469(f).
. . . . . . . . . . . . . . . .
Computation for Line 7, Part I. This part is
F. Tax attributable to net passive
Line 7
used by personal service corporations and
income. Subtract line E from line A.
closely held corporations with net passive
Closely held corporations that do not
If any of the following apply, enter -0- on
income.
have net active income and personal
line 7 and do not complete Part I or Part II of
service corporations enter the amount
Computation for Line 7, Part II. This part
the Computation for Line 7 below.
here and on Form 8810, line 7
. . .
is used by closely held corporations that
The corporation is a personal service
have net active income. See the instructions
corporation with a loss or zero on Form
for line 2, earlier, for the definition of net
8810, line 1d.
Part II. Tax Attributable to Net
active income. If the corporation has both net
The corporation is a personal service
Active Income
passive income and net active income,
corporation with net passive income on Form
complete Part I and Part II and enter the
8810, line 1d, and the corporation has an
amount from line Q on Form 8810, line 7.
overall loss from the entire disposition of a
G. Enter amount from line E if Part I is
passive activity that is equal to or greater
completed. Otherwise, enter income
Note. When using taxable income in the
tax before credits from Form 1120
than the net income on line 1d.
computation for line 7, it is not necessary to
(Schedule J, line 2)
The corporation is a closely held
. . . . . . . . .
H. Taxable income from Form
refigure items based on taxable income,
corporation with a loss or zero on Form
1120
such as the contributions deduction,
. . . . . . . . . . . . .
8810, line 1d, and that amount is equal to or
I. Net active income
dividends-received deduction, and the net
. . . . . .
greater than the net active income on Form
J. Net passive income or loss.
operating loss deduction.
8810, line 2.
See instructions for line
The corporation is a closely held
Use the applicable tax rates in section 11
J
. . . . . . . . . . . . . . .
corporation with net income on Form 8810,
when figuring the tax attributable amounts.
K. Combine lines I and J. If less
line 3, and the corporation has an overall
Also, see how to figure tax in the instructions
than zero, enter as a negative
loss from an entire disposition that is equal to
for the tax return filed.
amount
. . . . . . . . . . . .
or greater than the net income on line 3.
L. Subtract line K from line H. If
Line C. Enter the net income, if any, from
zero or less, enter -0- here and
Form 8810, line 1d. If the corporation has an
on line M
. . . . . . . . . . .
overall loss from the entire disposition of a
Instructions for Form 8810 (2016)
-11-

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