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Official form guide
Form 8586: Low-Income Housing Credit
IRS Form 8586 is used to claim the low-income housing credit for new qualified buildings placed in service after 1986. This general business credit is generally taken over a 10-year period.
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IRS Form 8586 - Low-Income Housing Credit
IRS Form 8586 is used to claim the low-income housing credit for new qualified buildings placed in service after 1986. This general business credit is generally taken over a 10-year period.
Risk Radar
Scan points- 1Failure to obtain an allocation from the housing credit agency (unless meeting the tax-exempt bond exception) prevents claiming the credit.
- 2Filing without an allocation from the housing credit agency (unless exempt).
- 3Not reporting Line 6 amount if filing as an estate or trust.
- 4Omitting Line 7 when subtracting line 6 from line 5 for estates/trusts.
- 5Failing to use Form 8611 when recapture is necessary.
Plain English
This form lets you claim a tax credit earned from owning or managing a qualifying rental building that meets certain income requirements. If your entity is not a partnership, S corporation, estate, or trust, you report this amount on Form 3800 instead of filling out the whole Form 8586.
Submission Date
- Filing date: 2023-12-07 22:10:28
- Preparation window: collect IDs, supporting records, and signatures in advance.
- Final review: verify names, dates, and required fields before submission.
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What this form is for
- Use this form when claiming the low-income housing credit for each new qualified low-income building placed in service after 1986.
- Do not use it when your entity is a partnership, S corporation, estate, or trust (unless you are reporting amounts allocated to beneficiaries).
- Check Form 3800 instead when your entity is a partnership, S corporation, estate, or trust and you need to report the amount on Schedule K or Part III.
Form selector
Use this form or another form?
Entity is an Estate or Trust
You must subtract line 6 from line 5 and report this result on Part III, line 4d.
✓ Check Line 7 calculation.
Entity is a Partnership or S Corp
Stop here after completing lines 3 and 4 and report the amount on your respective schedule's K column.
✓ Check if you need to attach schedules for basis decreases.
Credit is from a building with decreased qualified basis
A decrease in qualified basis requires checking Line 2; use this form to report the resulting credit or recapture situation.
✓ Ensure all associated BINs are listed on Line 2 if applicable.
Deadline or filing window
The low-income housing credit is generally taken over a 10-year credit period. A 15-year compliance period exists during which the building must meet certain requirements, triggering potential recapture obligations.
Checklist
What you need before filling it out
Purpose of Form
Use Form 8586 to claim the low-income housing credit. · General Instructions
Credit Period
Generally, it is taken over a 10-year credit period. · General Instructions
Allocation Requirement
Except for buildings financed with certain tax-exempt bonds, an allocation from the housing credit agency is required. · General Instructions
Recapture Trigger (Basis)
A decrease in qualified basis from the previous year may require recapturing a part of the credit taken. · Line 2 / General Instructions
Land Definition
"Land on which the building is located" includes only land that is functionally related and subordinate to the qualified low-income building. · General Instructions
Recordkeeping Period
Keep copies of Form 8586, Forms 8609, 8609-A, and 8611 for 3 years after the 15-year compliance period ends. · General Instructions
Credit Limit
The credit cannot exceed the amount allocated to the building (See section 42(h)(1)). · General Instructions
Before you submit
- 1Verify the Name(s) shown on return match your entity's official name.
- 2Confirm the Number of Forms 8609-A attached is accurate.
- 3Answer Line 2: Confirm 'Yes' or 'No' regarding a decrease in qualified basis since the prior tax year.
- 4If Line 2 is 'Yes,' verify that all relevant Building Identification Numbers (BINs) are entered on Lines 2(i)-(iv).
- 5Ensure Line 3 reflects the total credit amount from attached Form(s) 8609-A.
- 6If filing as an Estate/Trust, confirm Line 5 is totaled correctly before calculating Line 7.
- 7If filing as a Partnership/S Corp, ensure you have reported the final amount on Schedule K.
How to file this form
- 1Complete Lines 1 through 4 by entering required identifying information and initial credit amounts from attached Form(s) 8609-A.
- 2Calculate Line 5 by adding lines 3 (Current year credit) and line 4 (Credit from pass-through entities).
- 3If filing as an Estate or Trust, subtract the beneficiaries' share on Line 6 from Line 5 to determine the final amount for reporting on Form 3800.
- 4Report the total calculated amount (Line 5 for others; Line 7 for Estates/Trusts) according to your entity type instructions. Keep a copy of this completed Form 8586.
Known limitations
- 1The low-income housing credit cannot exceed the amount allocated to the building.
- 2Taxpayers who are partnerships, S corporations, estates, or trusts must report their low-income housing credit on Form 3800 (or Schedule K for partnerships/S corps).
- 3Taxpayers other than partnerships, S corporations, estates, or trusts whose only source of the credit is from pass-through entities are not required to complete or file this form; they can report it directly on Form 3800.
- 4If an estate or trust is subject to passive activity rules, credits disallowed in prior years and carried forward must be included on line 4 of Form 8586.
Field map
Compact field-by-field guide
General Info
2 items
Full legal name and taxpayer identification number (SSN or EIN).
Current mailing address.
Details
2 items
Complete all applicable sections of this form according to the official IRS instructions.
Enter the relevant dollar amount if this form involves tax calculation.
Certification
1 items
Read and acknowledge any certifications required by this form.
Signatures
1 items
Sign and date. Unsigned forms cannot be processed.
Almost done reviewing the fields?
Fillable formOpen in Editor->The current edition is Revision December 2023 (12/23). The form directs users to www.irs.gov/Form8586 for the latest information; specifically, lines 5 and 7 no longer include column references due to a Form 3800 redesign.
What changed or needs a fresh check
- Edition date — confirm the revision date reads December 2023 (12/23).
- OMB Number — confirm the form has OMB No. 1545-0984.
- Attachment Sequence No. — confirm the sequence number is 36a.
- Recapture Form — confirm that Form 8611 is the required document for recapturing credit.
- Compliance Period — confirm the residential rental building must meet requirements during a 15-year compliance period.
Quick Facts
Downloads
After you file
- 1Keep a copy of IRS Form 8586 and all Forms 8609, 8609-A, and 8611 for 3 years after the 15-year compliance period ends.
- 2If you must recapture credits, use Form 8611, Recapture of Low-Income Housing Credit.
- 3For developments related to Form 8586, check www.irs.gov/Form8586 for the latest information.
- 4When filing with an estate or trust, report the final amount on Form 3800, Part III, line 4d (unless it is a partnership/S corp).
Sources
- SRCPurpose of Form: Use Form 8586 to claim the low-income housing credit. [Instructions p.1]
- SRCCredit Period: The general business credit is allowed over a 10-year credit period. [Form p.1]
- SRCFiler Exception (General): 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. [Form p.1]
- SRCCredit Limit: The credit cannot exceed the amount allocated to the building. [Form p.1]
- SRCRecapture Requirement: If there is a reduction in qualified basis, you may have to recapture part of the credit taken (see Form 8611). [Form p.1]
- SRCRecordkeeping Period: Keep copies for 3 years after the 15-year compliance period ends. [Form p.1]
Common confusion points
Who must file Form 8586?
Taxpayers are generally required to use this form to claim the low-income housing credit.
→ Check if you fall into one of the exceptions listed on line 4.
What happens if my building's qualified basis decreases?
If there is a decrease, you may have to recapture part of the credit taken; enter the Building Identification Numbers (BINs) on line 2.
→ Verify that you are entering the correct BINs corresponding to the decreased basis buildings.
Do I need to file Form 8586 if I am an S corporation?
Partnerships and S corporations must report the amount on Schedule K, but they still use Form 8586 to calculate it.
→ Ensure the credit amount reported on Form 3800 matches what is calculated here.
What do I do with the final credit amount if I am an estate or trust?
Report line 7 (the net amount after subtracting beneficiaries' allocations) on Form 3800, Part III, line 4d.
→ Confirm that you have subtracted Line 6 from Line 5 before reporting to Form 3800.
What if my credit comes only from a pass-through entity?
If you are not the partnership/S corp/estate/trust itself, you might report it directly on Form 3800 instead of filing this form.
→ Check your business structure against the requirements listed in line 4.
When do I need to keep all my records?
Keep a copy of Form 8586 and related forms for 3 years after the 15-year compliance period ends.
Workflow map
Related forms and next steps
Before
Current
After
Often used with
⚠ If something goes wrong
- Use Form 8611 for Recapture of Low-Income Housing Credit if you must recapture amounts.
Questions about IRS Form 8586
What is IRS Form 8586 used for?
This form lets you claim a tax credit earned from owning or managing a qualifying rental building that meets certain income requirements. If your entity is not a partnership, S corporation, estate, or trust, you report this amount on Form 3800 instead of filling out the whole Form 8586.
Who must file IRS Form 8586?
Estates and trusts must file IRS Form 8586 to claim the low-income housing credit. All other taxpayers (except partnerships, S corporations, or estates/trusts whose only source is pass-through entities) are not required to complete or file this form.
What information does IRS Form 8586 require?
The form collects details on the amount allocated to beneficiaries of an estate or trust (Line 6), and it allows for reporting amounts subtracted from Line 5 (Line 7). If applicable, line 4 includes low-income housing credits from passive activities disallowed in prior years.
When is IRS Form 8586 due?
The credit is generally taken over a 10-year period. There is also a 15-year compliance period during which the building must meet certain requirements.
Where do I file IRS Form 8586?
The form does not specify a service center, but for latest developments, users should go to www.irs.gov/Form8586.
How do I complete IRS Form 8586?
The filer must complete the form, paying attention to whether they are an estate/trust (reporting on Line 6) or another entity. If the entity is subject to passive activity rules, Form 8582-CR determines the allowed credit that must be allocated between the entity and beneficiaries before reporting it. A copy of Form 8586 should be kept for 3 years after the 15-year compliance period ends.
What happens if IRS Form 8586 is filed incorrectly?
If credits must be recaptured due to basis reduction or disposition, the filer must use Form 8611; failing to do so means the recapture is not properly accounted for under section 42(j).
Who must file Form 8586?
Taxpayers are generally required to use this form to claim the low-income housing credit. Check if you fall into one of the exceptions listed on line 4.
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