Instructions For Form 8810 - 2016 (Page 12 of 13) in pdf

Worksheet 6—Allowed and Unallowed Credits

Keep for Your Records

Use Worksheet 6 to allocate the allowed and unallowed credits for each activity.

Column (a). Enter the total credits from Worksheet 5, column (c).

Column (b). Divide each of the credits in column (a) by the total of all credits in column (a). The total of the ratios should equal 1.00.

Column (c). Multiply Form 8810, line 8, by the ratios in column (b) and enter the results in column (c). These are the unallowed credits for 2016.

Keep a record of these amounts, so the credits can be carried to the next year.

Column (d). Subtract column (c) from column (a). These are the allowed credits for 2016. The amounts in this column are generally reported on

Form 3800. See Reporting Allowed Credits on Tax Return, below.

Form To Be

Name of Activity

(a) Credits

(b) Ratio

(d) Allowed Credits

Reported On

Credits

▶

Totals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1.00

passive activity, the amount to enter on line

Worksheet 6, column (d), on the applicable

it used in a passive activity or former passive

C is the net income from line 1d reduced by

lines of the separate credit forms.

activity by the unallowed credit that reduced

the overall loss, but not below zero. If the

the property's basis.

Credits From PTPs

result is zero, skip the rest of the Part I

The election is available for a fully taxable

computation.

A credit from a passive activity held through

disposition of an entire interest in an activity

a PTP is allowed to the extent of the tax

for which a basis adjustment was made as a

Line J. If the corporation has net passive

attributable to net passive income from that

income, enter the amount from line C on this

result of placing in service property for which

PTP. See Publicly Traded Partnerships

a credit was taken. The corporation can elect

line. If the corporation has a net loss from

(PTPs), earlier, for the definition of a PTP.

to increase the basis of the credit property

Form 8810, line 1d, enter that amount on line

J as a negative amount.

immediately before the disposition (by an

Do not enter credits from PTPs on Form

amount no greater than the amount of the

8810 or the worksheets. Instead, use the

Line 9

original basis reduction) to the extent that the

following steps to figure the allowed and

credit has not previously been allowed

If the corporation has one type of credit, the

unallowed credits from passive activities

amount on line 9 is the credit allowed for the

because of the passive credit limitations. The

held through PTPs.

year. See Reporting Allowed Credits on Tax

amount of the unallowed credit that can then

1. Figure the tax attributable to net

be applied against tax is reduced by the

Return below.

passive income for each PTP with current

amount of the basis adjustment.

year passive activity credits or prior year

If the corporation has more than one type

unallowed credits.

No basis adjustment can be elected on a

of credit or has credits from more than one

partial disposition of the corporation's

2. Use the smaller of the tax attributable

activity, use Worksheet 6 to figure how much

interest in a passive activity or if the

to net income from passive activities of the

of the credit on line 9 is allowed for each

disposition is not fully taxable. The amount of

PTP or the credit (including prior year

activity. Keep a record of the unallowed

any unallowed credit, however, may remain

unallowed credits) from passive activities of

credit and the activity to which it belongs to

available to offset the tax attributable to net

the PTP as the amount allowed. Report the

figure the credit allowed next year.

passive and net active income.

allowed credits on the form normally used

Reporting Allowed Credits on

and keep a record of the unallowed credits to

Paperwork Reduction Act Notice. We ask

Tax Return

be carried to the next year.

for the information on this form to carry out

Form 3800. Include on the applicable line

Part III. Election To

the Internal Revenue laws of the United

(3, 24, or 33) of Form 3800 each passive

States. You are required to give us the

Increase Basis of Credit

activity general business credit allowed from

information. We need it to ensure that you

Property

Worksheet 6, column (d).

are complying with these laws and to allow

us to figure and collect the right amount of

Cooperatives. A closely held cooperative

Line 10

tax.

that is allocating part or all of a general

business credit to patrons will show any

Check the box on this line if the corporation

You are not required to provide the

allocation of the credit allowed from

elects to increase the basis of credit property

information requested on a form that is

Instructions for Form 8810 (2016)

-12-

Instructions For Form 8810 - 2016 Page 12

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