Form 8611 (Rev. 12-2019)
Page 3
Line 2. Determine the amount to enter
on this line by completing a separate
Line 2 Worksheet for each prior year for
which line 7 of Form 8609-A (or
predecessor, Schedule A (Form 8609))
was completed.
Line 4. Enter the credit recapture
percentage, expressed as a decimal
carried to at least 3 places, from the
table below.
IF the recapture
event occurs
in . . .
THEN
enter on
line 4 . . .
Years 2 through 11 . . . . . .333
Year 12 . . . . . . . . . .267
Year 13 . . . . . . . . . .200
Year 14 . . . . . . . . . .133
Year 15 . . . . . . . . . .067
Line 6. Enter the percentage decrease in
qualified basis during the current year.
For this purpose, figure qualified basis
without regard to any additions to
qualified basis after the first year of the
credit period. Compare any decrease in
qualified basis first to additions to
qualified basis. Recapture applies only if
the decrease in qualified basis exceeds
additions to qualified basis after the first
year of the credit period.
If you disposed of the building or an
ownership interest in it and did not
satisfy the requirements for avoiding
recapture as outlined earlier under
Building dispositions, you must
recapture all of the accelerated portion
shown on line 5. Enter 1.000 on line 6.
Note: If the decrease causes the qualified
basis to fall below the minimum set-aside
requirements of section 42(g)(1) (the
20-50 test, the 40-60 test, or the average
income test), then 100% of the amount
shown on line 5 must be recaptured.
Enter 1.000 on line 6. If you elected the
40-60 test for this building and the
decrease causes you to fall below 40%,
you cannot switch to the 20-50 test or
the average income test to meet the set-
aside requirements. You must recapture
the entire amount shown on line 5.
Line 7. If there was a prior recapture of
accelerated credits on the building, do not
recapture that amount again as the result
of the current reduction in qualified basis.
Line 9. Figure the unused portion of the
accelerated amount on line 7 by:
Step 1. Totaling the credits
attributable to the building that you
could not use in prior years.*
Step 2. Reducing the result of step 1
by any unused credits attributable to
additions to qualified basis.
Step 3. Multiplying the result of step 2
by the decimal amount on line 4.
Step 4. Multiplying the result of step 3
by the decimal amount on line 6.
Step 5. Enter the result of step 4 on
line 9.
*
Generally, this is the amount of credit reported on
line 1 of this Form 8611 reduced by the total low-
income housing credits allowed on Form 8586 or
Form 3800 for each year.
Line 11. Figure the interest separately
for each prior tax year for which a credit
is being recaptured. Interest must be
figured at the overpayment rate
determined under section 6621(a)(1) and
compounded on a daily basis from the
due date (not including extensions) of the
return for the prior year until the earlier of
(a) the due date (not including
extensions) of the return for the recapture
year, or (b) the date the return for the
recapture year is filed and any income
tax due for that year has been fully paid.
Tables of interest factors to figure daily
compound interest were published in
Rev. Proc. 95-17, 1995-1 C.B. 556. The
interest rate in effect through December
31, 2019, is shown in Rev. Rul. 2019-21,
2019-38 I.R.B. 708. For periods after
December 31, 2019, use the overpayment
rate under section 6621(a)(1) in the
revenue rulings published quarterly in the
Internal Revenue Bulletin.
Note: If the line 8 recapture amount is
from a section 42(j)(5) partnership, the
partnership will figure the interest and
include it in the recapture amount
reported to you. Enter “-0-” on line 11
and write “Section 42(j)(5)” to the left of
the entry space for line 11.
Line 13. Subtract the amount on line 9
from the total of all prior year unused
credits attributable to the building (Step
1 of the line 9 instruction above). Enter
the result on line 13.
Line 14. For information on how to
report the recapture tax on Schedule 2
(Form 1040 or 1040-SR), see the
instructions for line 8 (other taxes) in the
Instructions for Form 1040 and 1040-SR.
Form 1120 filers report the recapture tax
on Form 1120, Schedule J, line 9b.
Line 15. Carry forward the low-income
housing credit attributable to this building
to the next tax year. See the Instructions
for Form 3800 for details on how to
report the carryforward of unused credits.
Lines 16 and 17. Only section 42(j)(5)
partnerships complete these lines. This
is a partnership that has at least 35
partners, unless the partnership elects
(or has previously elected) not to be
treated as a section 42(j)(5) partnership.
For purposes of this definition, an
individual and his or her spouse (and
their estates) are treated as one partner.
For purposes of determining the credit
recapture amount, a section 42(j)(5)
partnership is treated as the taxpayer to
which the low-income housing credit
was allowed and as if the amount of
credit allowed was the entire amount
allowable under section 42(a).
See the instructions for line 11 to
figure the interest on line 16. The
partnership must attach Form 8611 to its
Form 1065 and allocate this amount to
each partner on Schedule K-1 (Form
1065) in the same manner as the
partnership’s taxable income is allocated
to each partner.
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