Form 8609-A Instructions
Instructions for Form 8609-A, Annual Statement for Low-Income Housing Credit
Rev. December 2021
Related Forms
- Form 8609-A - Annual Statement for Low-Income Housing Credit
Department of the Treasury
Internal Revenue Service
Instructions for Form 8609-A
Annual Statement for Low-Income Housing Credit
(Rev. December 2021)
Section references are to the Internal Revenue
Code unless otherwise noted.
Form 8609-A to its tax return. If you are a
partner, shareholder, or beneficiary in the
Building dispositions after July 30,
2008. Disposing of a building or an
pass-through entity that owns the building, interest therein will generate a credit
file only Form 8586, Low-Income Housing
Credit, to claim the credit using the
information that the entity furnishes to you
on Schedule K-1.
recapture, unless it is reasonably
expected that the building will continue to
be operated as a qualified low-income
building for the remainder of the building's
compliance period.
General Instructions
Future Developments
For the latest information about
developments related to Form 8609-A and
its instructions, such as legislation
enacted after they were published, go to
Recapture of Credit
See section 42(j) and Notice 2021-12,
If the qualified basis of the building has
decreased from the qualified basis at the
close of the previous tax year, you may
have to recapture parts of the credits
allowed in previous years. See Form
8611, Recapture of Low-Income Housing
Credit.
section IV.D, as amended by Notice
2022-5, section IV.D for more information.
Sale of Building
What's New
Upon a change of ownership, the seller
should give the new owner a copy of the
Form 8609 (Parts I and II complete). This
form allows the new owner to substantiate
the credit.
Minimum credit rate. The Taxpayer
Certainty and Disaster Tax Relief Act of
2020 set a new minimum applicable credit
percentage of 4% for certain buildings.
If the close of the first year of the
credit period with respect to a
building is on or after April 1,
TIP
2020, and on or before December 31,
2022, then, for purposes of section 42(f)
(3)(A)(ii), the qualified basis for the
Specific Instructions
Item and Line Instructions
Part I—Compliance Information
Item A. Enter the building identification
number (BIN) from Part I, item E, of Form
8609.
Notice 2021-12. The instructions have
been updated throughout, as needed, to
reflect the temporary relief provided in
Notice 2021-12, 2021-6 I.R.B. 828 (at
clarified by Notice 2021-17, 2021-14
I.R.B. 984 (at IRS.gov/pub/irs-drop/
n-21-17.pdf), and as amended by Notice
2022-5, 2022-5 I.R.B. 457 (at
building for the first year of the credit
period is calculated by taking into account
any increase in the number of low-income
units by the close of the 6-month period
following the close of that first year. See
Notice 2021-12, section IV.E, as clarified
by Notice 2021-17, and as amended by
Notice 2022-5, section IV.E.
Item B. You need to file one Form 8609-A
for a newly constructed or existing
Revenue Ruling 2021-20. As a result of
Rev. Rul. 2021-20, 2021-51 I.R.B. 875 (at
clarified by Rev. Proc. 2021-43, 2021-51
I.R.B. 882 (at IRS.gov/pub/irs-drop/
rp-21-43.pdf), the 4% floor in section 42(b)
(3) does not apply to certain
building. You need to file a separate Form
8609-A for section 42(e) rehabilitation
expenditures because such expenditures
are treated as creating a new building.
Recapture and building dispositions.
The disposition of a building, or an interest
therein, will generate the recapture of the
credit. You can prevent the recapture if
you follow the procedures below, relative
to the date of the disposition of the
Item C. In order to claim the credit, you
must have an original, signed Form 8609
(or copy thereof) issued by a housing
credit agency assigning a BIN for the
building. This applies even if no allocation
is required (as in the case of a building
financed with tax-exempt bonds). Check
“Yes” to certify that you have the required
Form 8609 in your records.
building or the interest therein.
Form 8586. References to former Part I,
Buildings Placed in Service Before 2008,
in Form 8586 have been removed from
Line 18, later, to reflect changes in Form
8586.
Building dispositions before July
31, 2008. Disposing of a building or an
interest therein during the tax year will
generate credit recapture, unless you
timely post a satisfactory bond or pledge
eligible U.S. Treasury securities as
collateral. For details on the rules for
posting or pledging, see Rev. Rul. 90-60,
1990-2 C.B. 3, and Rev. Proc. 99-11,
1991-1 C.B. 275.
Any building owner claiming a
Purpose of Form
credit without receiving a
!
Form 8609-A is filed by a building owner
to report compliance with the low-income
housing provisions and calculate the
low-income housing credit. Form 8609-A
must be filed by the building owner for
each year of the 15-year compliance
period. File one Form 8609-A for the
allocation(s) for the acquisition of an
existing building and a separate Form
8609-A for the allocation(s) for
CAUTION
completed Form 8609 that is
signed and dated by an authorized official
of the housing credit agency and
submitting the completed Form 8609 (Part
I and Part II) to the IRS is subject to having
the credit disallowed.
Note. You may discontinue maintaining a
bond or pledging eligible U.S. Treasury
securities by making the election
described in Rev. Proc. 2008-60, 2008-43
I.R.B. 1006, and if it is reasonably
expected that the building will continue to
be operated as a qualified low-income
building for the remainder of the building's
compliance period. See Rev. Proc.
2008-60 for the details on making the
election.
Item D. If “No,” stop here and see Form
8611 to find out if you have to recapture
part of the credit allowed in prior years.
rehabilitation expenditures.
Item E. If “Yes,” see the instructions for
line 2 to figure the reduced qualified basis.
Also, see Form 8611 to find out if you have
to recapture part of the credit allowed in
prior years.
If the building owner is a partnership, S
corporation, estate, or trust (pass-through
entity), the entity will complete Form 8609
and Form 8609-A. The entity will attach
Feb 14, 2022
Cat. No. 52335U
If “No,” and the entire credit has been
claimed in prior tax years (generally, this
can occur after the 11th year for which the
credit has been claimed for the building),
do not complete Part II.
low-income units to all residential rental
units (the “unit fraction”) or the fractional
amount of floor space of the low-income
units to the floor space of all residential
rental units (the “floor space fraction”).
This fraction must be shown on line 2 as a
decimal carried out to at least four places
(for example, 50/100 = .5000). Low-income
units are units occupied by qualifying
tenants, while residential rental units are
all units, whether or not occupied.
Generally, a unit is not treated as a
low-income unit unless it is suitable for
occupancy, used other than on a transient
basis, and occupied by qualifying tenants.
Section 42(i)(3) provides for certain
0.1250 on line 2 ([0.5 + 0.5 + 0.5] / 12 =
0.1250).
This first year adjustment does not
affect the amount of qualified basis on
which the credit is claimed in the next 9
tax years. In general, the credit is claimed
in those years by reference to the qualified
basis at the close of each tax year.
Part II—Computation of Credit
Line 1. Generally, the eligible basis of a
building for its entire 15-year compliance
period is the amount of eligible basis
entered on Form 8609, line 7.
If the close of the first year of the
credit period with respect to a
building is on or after April 1,
TIP
Basis increases for buildings in
certain high cost areas. In order to
increase the credit for buildings in certain
high cost areas, the housing credit agency
may increase the eligible basis of
2020, and on or before December 31,
2022, then, for purposes of section 42(f)
(3)(A)(ii), the qualified basis for the
building for the first year of the credit
period is calculated by taking into account
any increase in the number of low-income
units by the close of the 6-month period
following the close of that first year. See
Notice 2021-12, section IV.E, as clarified
by Notice 2021-17, and as amended by
Notice 2022-5, section IV.E.
exceptions (for example, units that provide
transitional housing for the homeless may
qualify as low-income units). See section
42(i)(3) for more details. Also see section
42(g)(2)(D) regarding the available unit
rule and Regulations section 1.42-5(c)(1)
(ix) regarding the vacant unit rule.
buildings located in these areas (after
adjustments, if any, for federal subsidies
and grants). The agency may make this
increase under the high cost area
provisions of section 42(d)(5)(B). For
buildings placed in service before July 31,
2008, the high cost area provisions under
former section 42(d)(5)(C) apply.
Because the first year credit is not
determined solely by reference to the
qualified basis at the close of the year, any
reduction in credit resulting from the
application of the first year adjustment
may be claimed in the 11th year. See the
instructions for line 17.
If individuals are medical personnel or
other essential workers (as defined by
state or local governments) who provided
services during the COVID-19 pandemic,
then, for purposes of emergency housing
provided from April 1, 2020, to December
31, 2022, owners of low-income housing
projects may treat these individuals as if
they were “displaced individuals.” That is,
owners could have provided emergency
housing for these individuals during this
period pursuant to the provisions of Rev.
Proc. 2014-49, 2014-37 I.R.B 535 (at
Rev. Proc. 2014-50, 2014-37 I.R.B. 540
applicable. See Notice 2021-12,
Note. This increase cannot cause the
credit on line 15 to exceed the credit
amount allocated on line 1b, Part I, of
Form 8609.
Basis reductions for buildings
placed in service before July 31, 2008.
The amount of eligible basis entered on
Form 8609 does not include the cost of
land or the amount of any federal grant
received for the building during the first
year of the credit period. Do not reduce
the eligible basis on line 1 by the amounts
of any federal grants received after the
first year of the credit period. The
Line 3. Generally, multiply line 1 by line 2
to figure the portion of the eligible basis of
the building attributable to the low-income
residential rental units.
Imputed qualified basis of zero.
However, the qualified basis of the
building (line 3) is zero if any of the
following conditions apply.
The minimum set-aside requirement
•
calculation for line 14 will reduce the credit
by the amount of any federal grants
received during the compliance period
that did not reduce the eligible basis
during the first year of the credit period.
For more details on determining eligible
basis, see the instructions for Form 8609,
line 7.
section V.E, as amended by Notice
2022-5, section V.E.
elected for the project on Form 8609,
line 10c, is not met, or the entire building is
out of compliance with the requirements
under section 42.
If you dispose of the building, or your
entire interest in the building, before the
close of the tax year, the low-income
portion must be determined on the date
you disposed of the building. If you
The deep rent skewed test (15-40 test)
•
elected for the project on Form 8609,
line 10d, is violated. The 15-40 test is not
an additional test for satisfying the
dispose of less than your entire interest in
the building, the low-income portion must
be determined at the close of the tax year.
minimum set-aside requirements of
section 42(g)(1). The 15-40 test is an
election that relates to the determination of
a low-income tenant's income. If this test
is elected, at least 15% of all low-income
units in the project must be occupied at all
times during the compliance period by
tenants whose income is 40% or less of
the area median gross income (or, when
applicable, national non-metropolitan
median gross income or national
Basis reductions for buildings
placed in service after July 30, 2008.
The amount of eligible basis entered on
Form 8609 does not include the cost of
land or the amount of any costs financed
with the proceeds of a federally funded
grant. Do not reduce the eligible basis on
line 1 by the amounts of any federal grants
received after the first year of the credit
period. The calculation for line 14 will
reduce the credit for any costs financed
with the proceeds of a federal grant.
First-year modified percentage. For
the first year of the credit period, you must
use a modified percentage on line 2 to
reflect the average portion of a 12-month
period that the units in a building were
occupied by low-income individuals.
Figure the low-income portion as of the
end of each full month that the building
was in service during the year. Add these
percentages together and divide by 12.
Enter the result on line 2. For example, if a
building was in service for the last 3 full
months of your tax year, and was half
occupied by low-income tenants as of the
end of each of those 3 months, then
assuming the smaller fractional amount
was the unit fraction, you would enter
non-metropolitan median income).
You disposed of the building or your
•
For more details on determining eligible
basis, see the instructions for Form 8609,
line 7.
entire interest therein during the tax year
and did not follow the procedures
(described earlier under Recapture and
building dispositions) to prevent recapture.
In addition to using an imputed basis of
zero on line 3, you may have to recapture
a portion of credits previously taken. File
Form 8611 to figure and report the
Line 2. Only the portion of the basis on
line 1 attributable to the low-income rental
units in the building at the close of the tax
year qualifies for the credit. This is the
smaller of the fractional amount of
Instructions for Form 8609-A (Rev. 12-2021)
-2-
recaptured amount. This paragraph
affects only those taxpayers who dispose
of the building or their entire interest
therein. Those acquiring the building (or
any interest therein) are not affected and,
if the minimum set-aside requirements are
otherwise satisfied, they may take a credit
for the fraction of the year the building is
owned by them.
$8,274. The seller will enter $8,274 on
line 4 of his Form 8609-A. The buyer will
multiply $20,000 by 214/365 to get
$11,726. The buyer will enter $11,726 on
line 4 of her Form 8609-A.
July 30, 2008, see section 42(i)(2) (as in
effect after July 30, 2008).
A minimum applicable credit
percentage of:
!
CAUTION
Pass-through entities. If the building
is owned by a pass-through entity, the
entity does not need to make any
4% is in effect for new federally
•
subsidized buildings, and for existing
buildings, placed into service after
adjustment on line 4, unless the entity
either disposes of the building or its entire
interest therein, or acquires the building or
December 31, 2020. For the minimum 4%
rate to apply, a building must also receive
an allocation of housing credit dollar
Note. If the qualified basis of the building
is zero, or if the building has an imputed
qualified basis of zero, you may not claim
a credit for the building for the tax year.
You must enter zero on lines 3 and 16,
and skip lines 4 through 15, 17, and 18.
an interest therein during the tax year (and amount after December 31, 2020, or have
the entity previously had no interest in the
building). Do not make an adjustment on
line 4 for changes in the interests of the
a portion of the building financed with an
obligation described in section 42(h)(4)(A)
that is issued after December 31, 2020. If
members of the pass-through entity during these circumstances apply, don’t enter
At-risk limitation for individuals and
closely held corporations. The basis of
property may be limited if you borrowed
against the property and are protected
against loss, or if you borrowed money
from a person who has other than a
creditor interest in the property. See
section 42(k).
the tax year. Instead, the entity must
reflect these changes in the amount of
credit it passes through to its members.
less than 4% on line 2. See section 42(b)
(3) and the Taxpayer Certainty and
Disaster Tax Relief Act of 2020, section
201. But see the Note next.
Line 5. If the agency has made an
allocation on Form 8609, enter on line 5
the credit percentage shown on Form
8609, Part I, line 2. This percentage must
be shown on line 5 as a decimal carried
out to at least four places (for example,
8.13% would be shown on line 5 as
0.0813).
9% is in effect for new non-federally
•
subsidized buildings placed in service
after July 30, 2008. The 9% minimum
applies to new non-federally subsidized
buildings even if the taxpayer made an
irrevocable election under former section
42(b)(1)(A)(ii). If this circumstance
applies, don’t enter less than 9% on line 2.
See section 42(b)(2).
Line 4. If you owned the building (or an
interest therein) for the entire year, enter
zero on line 4 and go to line 5.
Disposal of building or interest
therein. If you disposed of a building or
your entire interest therein during the tax
year and you followed the procedures
(described earlier under Recapture and
building dispositions) to continue to claim
the credit, you may claim a credit based
only on the number of days during the tax
year for which you owned the building or
an interest therein.
Similarly, if you previously had no
interest in the building, but you acquired
the building or an interest therein during
the tax year, you may claim a credit based
only on the number of days during the tax
year for which you owned the building or
an interest therein.
Buildings placed in service before
July 31, 2008. If you were allocated a
70% present value credit percentage for a
building that was not federally subsidized
(as defined on the date the building was
placed in service) and the building later
receives a federal subsidy, your credit
percentage is reduced to the 30% present
value credit that was in effect during the
month the building was placed in service
or for the month elected under former
section 42(b)(2)(A)(ii), whichever applies.
The 30% present value credit applies to
the building for the year the federal
subsidy was received and for the
Note. As a result of Rev. Rul. 2021-20 (at
clarified by Rev. Proc. 2021-43 (at
4% floor in section 42(b)(3) does not
apply to:
A building that is financed in part with a
•
draw-down exempt facility bond issue that
was issued in 2020 and on which one or
more draws are taken after December 31,
2020;
A building that is financed in part with
•
proceeds of an exempt facility bond issue
that was issued in 2020 and in part with
proceeds of a different exempt facility
bond issue that was issued in a minimal
amount after December 31, 2020; or
remainder of the compliance period,
whether or not the federal subsidy is
repaid. For the definition of federal
The owner who has owned the building
for the longest period during the month in
which the change in ownership occurs is
deemed to have owned the building for
that month. If the seller and new owner
have owned the building for the same
amount of time during the month of
subsidy that was in effect before July 31,
2008, see section 42(i)(2) (as in effect
before July 31, 2008).
A building that receives an allocation of
•
housing credit dollar amount in 2020 and a
minimal additional allocation after
December 31, 2020.
Buildings placed in service after
July 30, 2008. If you were allocated a
70% present value credit percentage for a
building that was not federally subsidized
(as defined on the date the building was
placed in service) and the building later
receives a federal subsidy, your credit
percentage is reduced to the 30% present
value credit that was in effect during the
month the building was placed in service
or for the month elected under section
42(b)(1)(A)(ii), whichever applies. The
30% present value credit applies to the
building for the year the federal subsidy
was received and for the remainder of the
compliance period, whether or not the
federal subsidy is repaid. For the definition
of federal subsidy that was in effect after
Line 6. If you owned the building, or had
an interest therein, for the entire tax year,
multiply line 3 by line 5. If you had no
ownership interest in the building for a
portion of the tax year, multiply line 4 by
line 5.
disposition, the seller is deemed to have
owned the building for that month.
Example. Both the buyer and the
seller are calendar-year taxpayers. The
sale takes place on May 25 of a 365-day
calendar year. The qualified basis of the
low-income building is $20,000. The seller
and buyer will each complete a separate
Form 8609-A, and enter $20,000 on line 3.
In this situation, the seller is deemed to
have owned the building for all 31 days of
May. Therefore, the seller owned the
building for 151 days of the 365-day tax
year, and the buyer owned the building for
the remaining 214 days. The seller will
multiply $20,000 by 151/365 to get
Lines 7 Through 12
If you are not claiming a credit for
additions to qualified basis on line 7, skip
lines 7 through 12 and go to line 13.
You may claim a credit for an
addition to qualified basis only if
!
CAUTION
the credit amounts have been
allocated by the housing credit agency to
cover these additions.
Instructions for Form 8609-A (Rev. 12-2021)
-3-
relating to the increase were occupied.
This adjustment is required if the increase
in qualified basis of the building exceeds
the qualified basis (including additions to
qualified basis) of the building in any prior
tax year. To determine this adjustment
amount, complete the Line 11 Worksheet
at the end of these instructions.
Line 7. An addition to qualified basis
results when there is an increase in the
number of low-income units or an increase
in the floor space of the low-income units
over that which existed at the close of the
first year of the credit period (before
application of the modified percentage
calculation). Credits for an addition to
qualified basis are claimed at the reduced
credit percentage of two-thirds of the
credit percentage (expressed as a
decimal carried out to at least four places)
on line 5 through the end of the 15-year
compliance period.
If you are claiming a credit for additions
to qualified basis, you must subtract the
original qualified basis of the building at
the close of the first year of the credit
period (see Form 8609, line 8a) from the
building's qualified basis entered on line 3.
Enter the result on line 7. If the result is
zero or less, skip lines 8 through 12 and
enter the credit from line 6 on line 13.
Line 16. To determine the amount to
enter on line 16, see the information that
later.
1. If the building is owned completely
by one taxpayer, enter the line 15 credit
(after adjustment for any applicable
special rule below) on line 16.
2. If the building is owned by more
than one taxpayer, and those taxpayers
are not members of a pass-through entity,
then the line 15 credit (after adjustment for
distributed according to each taxpayer's
respective ownership interest in the
Lines 13 Through 18
Line 13. If you are not claiming a credit
for additions to qualified basis on line 7,
skip lines 7 through 12 and enter the
amount from line 6 on line 13.
Line 14. The eligible basis on line 1 must
be reduced by federal grants received. If a
reduction does not apply because this is
the first year of the credit period (line 1
already reflects the reduction or
building. For example, if a building is
owned by individuals A and B (60% by A
and 40% by B), each would complete a
separate Part II as follows. Lines 1 through
15 would be the same for each, assuming
no part-year adjustments are necessary.
However, A would enter 60% of line 15 on
line 16, and B would enter 40% of line 15
on line 16. Therefore, enter on line 16 your
share of the line 15 credit for the building
that relates to your interest in the building.
If your interest increases or decreases
during the tax year, the change must be
taken into account in determining your
share of the line 15 credit.
noninclusion of a federal grant), or no
federal grant was received, enter zero on
line 14. Otherwise, follow the instructions
that apply for the date the building was
placed in service.
Line 8. The determinations and
calculations you make on line 8 follow the
instructions for line 4. Therefore, if you
owned the building (or an interest therein)
for the entire year, enter zero on line 8 and
go to line 9.
Buildings placed in service before
July 31, 2008. Reduce the eligible basis
on line 1 by the amount of any federal
grant for the building, or the operation
thereof, received during the 15-year
compliance period.
Disposal of building or interest
therein. If you disposed of a building or
your entire interest therein during the tax
year, see Disposal of building or interest
Note. The aggregate credit claimed by
the owners of the building cannot exceed
the line 15 credit amount for the building.
Buildings placed in service after
July 30, 2008. Reduce the eligible basis
on line 1 by the amount of any costs
financed by the proceeds of a federal
grant.
Regardless of the date the building was
placed in service, figure the reduction as
follows.
3. If a pass-through entity is
wherever line 3 and line 4 are referenced,
substitute line 7 and line 8, respectively.
completing Form 8609-A as the sole
owner of the building, enter the line 15
credit (after adjustment for any applicable
special rule below) on line 16.
Pass-through entities. If the building
is owned by a pass-through entity, see
and, wherever line 4 is referenced,
substitute line 8 instead.
Special rules. If a taxpayer is subject
to recapture upon the disposition of a
building or interest therein because the
taxpayer did not follow the procedures
(described earlier under Recapture and
building dispositions) to prevent recapture,
no credit is allowed to the taxpayer for that
percentage of the interest disposed of by
the taxpayer. (However, see De minimis
recapture rule, later.) The credit allowed to
the taxpayer for the tax year is determined
by reference to the taxpayer's remaining
interest in the building at the close of the
tax year. For example, assume that a
taxpayer owns 100% of a building for 273
days in a 365-day calendar tax year, and
40% of the building for the remaining 92
days in the tax year (the taxpayer
Step 1. Divide the total amount of all
federal grants received for the building
during the compliance period that did not
already reduce the amount of the eligible
basis (reported on line 1) by the eligible
basis on line 1 of this Form 8609-A. Enter
the result as a decimal carried out to at
least four places.
Line 9. The credit for additions to the
building's qualified basis is determined
using two-thirds of the credit percentage
allowable for the building's original
qualified basis. Therefore, one-third of the
credit percentage (expressed as a
decimal carried out to at least four places)
on line 5 is not allowed. Enter on line 9
one-third of the amount shown on line 5.
This amount must be reported on line 9 as
a decimal carried out to at least four
places (for example, if the credit
Note. If the eligible basis on line 1 of this
Form 8609-A was increased by a
percentage allowable under section 42(d)
(5)(B) (former section 42(d)(5)(C) for
buildings placed in service before July 31,
2008), and the increased percentage is
reflected on line 3b of Form 8609, then
increase the total amount of all federal
grants in Step 1 by this percentage
increase and divide this amount by the
eligible basis on line 1 of this Form
8609-A. For example, if the percentage
increase is 130% and all federal grants
total $11,000, multiply $11,000 by 1.3000
and divide the result ($14,300) by the
eligible basis on line 1.
percentage entered on line 5 is 0.0813,
one-third of that percentage would be
expressed as 0.0271). See section 42(f)
(3).
disposed of a 60% interest on the last day
of September). If the taxpayer does not
follow the procedures to prevent
Line 10. If you owned the building, or had
an interest therein, for the entire tax year,
multiply line 7 by line 9. If you had no
ownership interest in the building for a
portion of the tax year, multiply line 8 by
line 9.
recapture, the taxpayer's credit on line 16
would be based on 40% of the line 15
credit for the building. Similarly, although a
taxpayer might not be subject to recapture
upon a disposition of a de minimis portion
(explained later) of the taxpayer's interest
in the building, no credit is allowed to the
taxpayer for the percentage of the interest
Line 11. Additions to qualified basis must
be adjusted to reflect the average portion
of the year that the low-income units
Step 2. Multiply the decimal amount
determined in Step 1 by the credit on
line 13. Enter this result on line 14.
Instructions for Form 8609-A (Rev. 12-2021)
-4-
disposed of by the taxpayer. The credit
allowed to the taxpayer for the tax year is
determined by reference to the taxpayer's
remaining interest in the building at the
close of the tax year.
partnerships to which section 42(j)(5)(B)
applies) owning interests in qualified
low-income buildings. The rule allows a
partner to elect to avoid or defer recapture
resulting from a disposition of interest in a
partnership without posting bond (in a
situation where it was necessary to post
bond to avoid or defer recapture) until the
partner has disposed of more than 331/3%
of the partner's greatest total interest in the
qualified low-income building through the
partnership. See Rev. Rul. 90-60, 1990-2
C.B. 3, for more information on the de
minimis rule.
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
If the taxpayer follows the procedures
to prevent recapture, the taxpayer is
allowed credit for the year both with
respect to the ownership interest disposed
of by the taxpayer and the interest
retained by the taxpayer. For example,
again assume that a taxpayer owns 100%
of a building for the first 273 days in a
365-day calendar tax year and 40% of the
building for the last 92 days of the year.
After following procedures, the taxpayer's
credit on line 16 would be based upon
273/365 of 100% (or 74.79%) of the
line 15 credit for the building plus 92/365
of 40% (or 10.08%) of the line 15 credit
amount.
If a taxpayer follows the procedures to
prevent recapture upon the disposition of
the building or upon a disposition of the
taxpayer's entire interest in the building,
the taxpayer's line 16 credit amount is
determined by multiplying the line 15
credit amount by the percentage interest
in the building disposed of by the
Upon application by the building owner,
the IRS may waive any recapture of the
low-income housing credit for any de
minimis error in complying with the
minimum set-aside requirements.
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
Line 17. The first-year credit may have
been reduced based on the number of full
months the building was in service. The
deferred balance of the credit for the first
year is allowed in the 11th year. Include it
on line 17 as a positive amount.
For example, see the example under
First-year modified percentage, earlier. If
this is the 11th year, enter 0.8750 times
the eligible basis of the building (line 1)
times the credit percentage (line 5). The
factor 0.8750 is 1.0000 minus 0.1250, the
modified percentage figured for year 1 in
the example.
estimates shown in the instructions for
their individual income tax return. The
estimated burden for all other taxpayers
who file this form is:
Recordkeeping .
.
.
.
.
.
.
.
.
.
.
.
7 hr., 38 min.
1 hr., 47 min.
Learning about the law or the
taxpayer. For example, if a building is
owned by individuals A and B (60% by A
and 40% by B) and on the last day of the
fifth month of the tax year, C buys A's 60%
interest in the building and A follows the
procedures, then A would enter 60% of
line 15 on line 16. (Lines 4 and 8 have
already taken into account the 5 months of
the tax year that A held an interest in the
building.)
form.
Preparing and sending the
form to the IRS
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
1 hr., 59 min.
Line 18. Report this amount on line 3 of
Form 8586. For buildings placed in service
after December 31, 2007, the credit is not
limited by the alternative minimum tax
rules.
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. You
can write to the Internal Revenue Service
at the address listed in the instructions for
the tax return with which this form is filed.
De minimis recapture rule. For
administrative purposes, the IRS has
adopted a de minimis rule that applies to
partners in partnerships (other than
Paperwork Reduction Act Notice. We
ask for the information on these forms to
carry out the Internal Revenue laws of the
United States. You are required to give us
Line 11 Worksheet (Keep for Your Records)
1
2
3
Enter the qualified basis of the building from line 3 of this tax year's Form 8609-A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1
2
Multiply the amount on line 1 of the previous year's Form 8609-A by the amount on line 2 of that Form 8609-A . . . . . . . . . . . . .
Increased qualified basis. Subtract line 2 above from line 1 above. But if line 2 above is more than zero but less than the original
qualified basis of the building entered on Form 8609, line 8a, then enter the amount from line 7 of this Form 8609-A instead.
Note. If line 3 above is zero or less, do not complete the rest of this worksheet. Enter -0- on line 11 of Form 8609-A . . . . . . . . .
3
4
Modified percentage. For each month during the tax year, figure the increase, if any, in the low-income portion of the building for
that month over the low-income portion of the building at the close of the previous tax year (the amount on line 2 of the previous
tax year's Form 8609-A). For example, if the previous tax year's low-income portion of 0.5000 remained at 0.5000 for the first 9
months of this tax year and then increased to 0.7500 for October, November, and December, then subtract 0.5000 from 0.7500 to
get an increase of 0.2500 for each month. Add these amounts together, divide by 12, and enter the result. (This amount must be
shown as a decimal carried out to at least four places (for example, 0.2500 + 0.2500 + 0.2500 = 0.7500, divided by 12 =
0.0625.)) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4
5
6
5
6
7
Increased qualified basis entitled to reduced credit. Multiply line 4 above by Form 8609-A, line 1 . . . . . . . . . . . . . . . . . . . . . .
Increased qualified basis not entitled to reduced credit. Subtract line 5 above from line 3 above . . . . . . . . . . . . . . . . . . . . . .
Line 11 modification. Multiply line 6 above by two-thirds of the amount on line 5 of Form 8609-A. Enter the result here and on
line 11 of Form 8609-A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7
Instructions for Form 8609-A (Rev. 12-2021)
-5-