8586 Low-Income Housing Credit

8586

Form
(Rev. December 2023)
Department of the Treasury
Internal Revenue Service

Low-Income Housing Credit

OMB No. 1545-0984

Attach to your tax return.
Go to www.irs.gov/Form8586 for the latest information.

Attachment
Sequence No. 36a
Identifying number

Name(s) shown on return

1
2

3
4

Number of Forms 8609-A attached . . . . . . . . . . . . . . . . .
Has there been a decrease in the qualified basis of any buildings accounted for on line 1 since the close of the
preceding tax year?
Yes
No
If “Yes,” enter the building identification numbers (BINs) of the
buildings that had a decreased basis. If you need more space, attach a schedule.
(i)
(ii)
(iii)
(iv)
Current year credit from attached Form(s) 8609-A (see instructions) . . . . . . . . . . . . .
Low-income housing credit from partnerships, S corporations, estates, and trusts . . . . . . . .

5

Add lines 3 and 4. Estates and trusts, go to line 6. Partnerships and S corporations, stop here and report
this amount on Schedule K. All others, stop here and report this amount on Form 3800, Part III, line 4d . .

6
7

Amount allocated to beneficiaries of the estate or trust (see instructions) . . . . . . . .
Estates and trusts, subtract line 6 from line 5. Report this amount on Form 3800, Part III, line 4d .

Future Developments

.
.

.
.

.
.

3
4
5
6
7

Recordkeeping

For the latest information about developments related to Form 8586 and
its instructions, such as legislation enacted after they were published,
go to www.irs.gov/Form8586.

What’s New
Lines 5 and 7. We removed the column references in lines 5 and 7 to
accommodate the Form 3800 redesign.

General Instructions
Section references are to the Internal Revenue Code unless otherwise
noted.

Purpose of Form
Use Form 8586 to claim the low-income housing credit. This general
business credit is allowed for each new qualified low-income building
placed in service after 1986. Generally, it is taken over a 10-year credit
period.
Taxpayers, other than partnerships, S corporations, estates, or trusts,
whose only source of this credit is from those pass-through entities, are
not required to complete or file this form. Instead, they can report this
credit directly on Form 3800.

Qualified Low-Income Housing Project
The credit cannot exceed the amount allocated to the building. See
section 42(h)(1) for details.
The low-income housing credit can only be claimed for residential
rental buildings in low-income housing projects that meet one of the
minimum set-aside tests. For details, see the instructions for Form 8609,
Part II, line 10c.
Except for buildings financed with certain tax-exempt bonds, you may
not take a low-income housing credit on a building if it has not received
an allocation from the housing credit agency. No allocation is needed
when 50% or more of the aggregate basis of the building and the land
on which the building is located is financed with certain tax-exempt
bonds. The owner must still get a Form 8609 from the appropriate
housing credit agency (with the applicable items completed, including
an assigned BIN). “Land on which the building is located” includes only
land that is functionally related and subordinate to the qualified lowincome building. (See Regulations sections 1.103-8(a)(3) and 1.103-8(b)
(4)(iii).)

Recapture of Credit
There is a 15-year compliance period during which the residential rental
building must continue to meet certain requirements. If, as of the close
of any tax year in this period, there is a reduction in the qualified basis of
the building from the previous year, you may have to recapture a part of
the credit you have taken. Similarly, you may have to recapture part of
the credits taken in previous years upon certain dispositions of the
building or interests therein, unless you follow the procedures to prevent
recapture. See Recapture and building dispositions in the Instructions
for Form 8609-A, Annual Statement for Low-Income Housing Credit, for
details. If you must recapture credits, use Form 8611, Recapture of
Low-Income Housing Credit. See section 42(j) for details.

Keep a copy of this Form 8586 and all Forms 8609, 8609-A, and 8611
for 3 years after the 15-year compliance period ends.

Specific Instructions
Line 2. A decrease in qualified basis will result in recapture if the
qualified basis at the close of the tax year is less than the qualified basis
at the close of the first year of the credit period.
If the reduction in qualified basis at the close of the tax year also
results in a violation of the minimum set-aside requirement, then no
credit is allowable for the year.
Line 3. The credit for the year is figured on Form 8609-A for each
building. Attach a copy of each Form 8609-A you completed for the tax
year to Form 8586. Enter on line 3 the total credit for attached Form(s)
8609-A.
Line 6. Estates or trusts. Allocate the low-income housing credit on
line 5 between the estate or trust and the beneficiaries in the same
proportion as income was allocated and enter the beneficiaries’ share
on line 6.
If the estate or trust is subject to the passive activity rules, include on
line 4 any low-income housing credits from passive activities disallowed
for prior years and carried forward to this year. Complete Form 8582CR, Passive Activity Credit Limitations, to determine the allowed credit
that must be allocated between the estate or trust and the beneficiaries.
For details, see the Instructions for Form 8582-CR.
Paperwork Reduction Act Notice. We ask for the information on this
form to carry out the Internal Revenue laws of the United States. You
are required to give us the information. We need it to ensure that you are
complying with these laws and to allow us to figure and collect the right
amount of tax.
You are not required to provide the information requested on a form
that is subject to the Paperwork Reduction Act unless the form displays
a valid OMB control number. Books or records relating to a form or its
instructions must be retained as long as their contents may become
material in the administration of any Internal Revenue law. Generally, tax
returns and return information are confidential, as required by section
6103.
The time needed to complete and file this form will vary depending on
individual circumstances. The estimated burden for individual taxpayers
filing this form is approved under OMB control number 1545-0074 and
is included in the estimates shown in the instructions for their individual
income tax return. The estimated burden for all other taxpayers who file
this form is shown below.
Recordkeeping . . . . . . . . . . . .
4 hr., 4 min.
Learning about the law or the form . . . . . . . . 52 min.
Preparing and sending the form to the IRS . . . . 2 hr., 10 min.
If you have comments concerning the accuracy of these time
estimates or suggestions for making this form simpler, we would be
happy to hear from you. See the instructions for the tax return with
which this form is filed.

Cat. No. 63987I

Form 8586 (Rev. 12-2023)