This document is an IRS Form 8611 used to calculate the recapture of low-income housing tax credits when the qualified basis of a building decreases from one year to the next or when a building or interest in a building is disposed of. The form has instructions for completing lines 1 through 17 to determine the amount of credit that must be recaptured and/or carried forward. It provides details on calculating reductions to qualified basis, credit recapture percentages, interest computations, and how to report recapture tax.

1. 8611 Recapture of Low-Income Housing Credit
Form OMB No. 1545-1035
Attach to your return.
(Rev. January 2009)
Note: Complete a separate Form 8611 for each building to Attachment
Department of the Treasury
90
which recapture applies. Sequence No.
Internal Revenue Service
A Name(s) shown on return B Identifying number
C Address of building (as shown on Form 8609) D Building identification E Date placed in service (from
number (BIN) Form 8609)
F If building is financed in whole or part with tax-exempt bonds, see instructions and furnish: (2) Date of issue
(1) Issuer’s name
(3) Name of issue (4) CUSIP number
Note: Skip lines 1–7 and go to line 8 if recapture is passed through from a flow-through entity (partnership, S corporation, estate,
or trust).
1
1 Enter total credits reported on Form 8586 in prior years for this building
2
2 Credits included on line 1 attributable to additions to qualified basis (see instructions)
3
3 Credits subject to recapture. Subtract line 2 from line 1
.
4
4 Credit recapture percentage (see instructions)
5
5 Accelerated portion of credit. Multiply line 3 by line 4
6 Percentage decrease in qualified basis. Express as a decimal amount carried out to at least 3 places
.
6
(see instructions)
7 Amount of accelerated portion recaptured (see instructions if prior recapture on building).
Multiply line 5 by line 6. Section 42(j)(5) partnerships, go to line 16. All other flow-through
entities (except electing large partnerships), enter the result here and enter each recipient’s
share in the appropriate box of Schedule K-1. Generally, flow-through entities other than
electing large partnerships will stop here. (Note: An estate or trust enters on line 8
only its share of recapture amount attributable to the credit amount reported on its
7
Form 8586.)
8
8 Enter recapture amount from flow-through entity (see Note above)
9
9 Enter the unused portion of the accelerated amount from line 7 (see instructions)
10
10 Net recapture. Subtract line 9 from line 7 or line 8. If less than zero, enter -0-
11
11 Enter interest on the line 10 recapture amount (see instructions)
12
12 Total amount subject to recapture. Add lines 10 and 11
13 Unused credits attributable to this building reduced by the accelerated portion included on
13
line 9 (see instructions)
14 Recapture tax. Subtract line 13 from line 12. If zero or less, enter -0-. Enter the result here
and on the appropriate line of your tax return (see instructions). If more than one
Form 8611 is filed, add the line 14 amounts from all forms and enter the total on the appropriate
14
line of your return. Electing large partnerships, see instructions
15 Carryforward of the low-income housing credit attributable to this building. Subtract
line 12 from line 13. If zero or less, enter -0- (see instructions) 15
Only Section 42(j)(5) partnerships need to complete lines 16 and 17.
16
16 Enter interest on the line 7 recapture amount (see instructions)
17 Total recapture. Add lines 7 and 16 (see instructions) 17
8611
For Paperwork Reduction Act Notice, see instructions. Cat. No. 63983Q Form (Rev. 1-2009)

2. 2
Form 8611 (Rev. 1-2009) Page
● The decrease in qualified basis does
Building dispositions after July 30,
General Instructions 2008. Disposing of a building or an not exceed the additions to qualified
Section references are to the Internal interest therein will generate a credit basis for which credits were allowable in
Revenue Code. recapture, unless it is reasonably years after the year the building was
expected that the building will continue placed in service;
Purpose of Form to be operated as a qualified low-income ● You correct a noncompliance event
building for the remainder of the
Use this form if you must recapture part within a reasonable period after it is
building’s compliance period.
of the low-income housing credit you discovered or should have been
claimed in previous years because the discovered;
See section 42(j) for more information.
qualified basis decreased from one year
● The qualified basis is reduced
Note. If the decrease in qualified basis is
to the next or you disposed of a
because of a casualty loss, provided the
because of a change in the amount for
building, or your interest therein, and
property is restored or replaced within a
which you are financially at risk on the
you did not follow the procedures that
reasonable period.
building, then you must first recalculate
would have prevented recapture of the
the amount of credit taken in prior years Recordkeeping
credit.
under section 42(k) before you calculate
Decrease in qualified basis. The In order to verify changes in qualified
the recapture amount on this form.
decrease may result from a change in basis from year to year, keep a copy of
To complete this form you will need
the eligible basis, or the building no all Forms 8586, 8609, 8609-A (or
copies of the following forms that you
longer meets the minimum set aside predecessor, Schedule A (Form 8609)),
have filed:
requirements of section 42(g)(1), the 8611, and 8693 for 3 years after the
● Form 8586, Low-Income Housing
gross rent requirements of section 15-year compliance period ends.
Credit (and Form 3800, General Business
42(g)(2), or the other requirements for
Specific Instructions
Credit, if applicable);
the units which are set aside.
● Form 8609, Low-Income Housing Note. If recapture is passed through
Building dispositions. The disposition
Credit Allocation and Certification (or from a flow-through entity (partnership,
of a building, or an interest therein, will
predecessor, Form 8609, Low-Income S corporation, estate, or trust), skip lines
generate the recapture of the credit. You
Housing Credit Allocation Certification); 1–7 and go to line 8.
can prevent the recapture if you follow
● Form 8609-A, Annual Statement for
the procedures below, relative to the Item F. If the building is financed with
date of the disposition of the building or tax-exempt bonds, furnish the following
Low-Income Housing Credit (or
the interest therein. information: (1) name of the entity that
predecessor, Schedule A (Form 8609),
issued the bond (not the name of the
Annual Statement); and
Building dispositions before July 31,
entity receiving the benefit of the
● Form 8611.
2008. Disposing of a building or an
financing); (2) date of issue, generally the
interest therein during the tax year will
Note. Flow-through entities must give first date there is a physical exchange of
generate a credit recapture, unless you
partners, shareholders, and beneficiaries the bonds for the purchase price;
timely post a satisfactory bond or pledge
the information that is reported in items (3) name of the issue, or if not named,
eligible U.S. Treasury securities as
C, D, E, and F of Form 8611. other identification of the issue; and
collateral. For details on the rules for
(4) CUSIP number of the bond with the
Recapture does not apply if:
posting or pledging, see Rev. Rul. 90-60,
latest maturity date. If the issue does not
1990-2 C.B. 3, and Rev. Proc. 99-11, ● You disposed of the building or an
have a CUSIP number, enter “None.”
1999-1 C.B. 275. ownership interest in it and you satisfy
Line 1. Enter the total credits claimed on
the requirements for avoiding recapture
Note. You may discontinue maintaining
the building for all prior years from all
as outlined earlier under Building
a bond or pledging eligible U.S. Treasury
Forms 8586 (before reduction due to the
dispositions;
securities by making the election
tax liability limit) you have filed. Prior to
described in Rev. Proc. 2008-60, ● You disposed of not more than 331⁄ 3 %
the December 2006 revision of Form
2008-43 I.R.B. 1006, and if it is in the aggregate of your ownership
8586, the credits (before reduction due
reasonably expected that the building interest in a building that you held
to the tax liability limit) were reported in
will continue to be operated as a through a partnership, or you disposed
Part I. Do not include credits taken by a
qualified low-income building for the of an ownership interest in a building
previous owner.
remainder of the building’s compliance that you held through a partnership to
period. See Rev. Proc. 2008-60 for the which section 42(j)(5) applies or through
details on making the election. an electing large partnership;
Line 2 Worksheet (*Line reference is to Form 8609-A (or predecessor, Schedule A (Form 8609).)
a
a Enter the amount from line 10*
b
b Multiply a by 2
c
c Enter the amount from line 11*
d
d Subtract c from b
e Enter decimal amount figured in step 1 of the instructions for line 14*. If line 14* does not apply to you,
e
enter -0-
f
f Multiply d by e
g
g Subtract f from d
h
h Divide line 16* by line 15*. Enter the result here
i Multiply g by h. Enter this amount on line 2. (If more than one worksheet is completed, add the amounts
i
on i from all worksheets and enter the total on line 2.)

3. 3
Form 8611 (Rev. 1-2009) Page
March 31, 2009, use the overpayment
Line 7. If there was a prior recapture of
Line 2. Determine the amount to enter
rate under section 6621(a)(1) in the
accelerated credits on the building, do
on this line by completing a separate
revenue rulings published quarterly in
not recapture that amount again as the
Line 2 Worksheet (on page 2) for each
the Internal Revenue Bulletin.
result of the current reduction in
prior year for which line 7 of Form
qualified basis. The example below
8609-A (or predecessor, Schedule A Note. If the line 8 recapture amount is
demonstrates how to incorporate into
(Form 8609)) was completed. from a section 42(j)(5) partnership, the
the current (Year 4) recapture the first partnership will figure the interest and
Line 4. Enter the credit recapture
year (Year 1) accelerated portion as a include it in the recapture amount
percentage, expressed as a decimal
result of a prior year (Year 2) recapture reported to you. Enter “-0-” on line 11
carried to at least 3 places, from the
event. and write “Section 42(j)(5)” to the left of
table below:
the entry space for line 11.
Line 9. Compute the unused portion of
IF the recapture THEN
the accelerated amount on line 7 by: Line 13. Subtract the amount on line 9
event occurs enter on
from the total of all prior year unused
Step 1. Totaling the credits
in . . . line 4 . . .
credits attributable to the building (Step
attributable to the building that you
1 of the line 9 instruction above). Enter
could not use in prior years.*
Years 2 through 11 .333
the result on line 13.
Step 2. Reducing the result of step 1
Year 12 .267
Line 14.
by any unused credits attributable to
Year 13 .200 additions to qualified basis. For information
on how to report
Step 3. Multiplying the result of step 2
Year 14 .133
the recapture tax See the instructions
by the decimal amount on line 4.
Year 15 .067 on... for the...
Step 4. Multiplying the result of step 3
by the decimal amount on line 6.
Line 6. Enter the percentage decrease in Form 1040 “Total tax” line in the
Step 5. Enter the result of step 4 on
qualified basis during the current year. Instructions for Form
line 9. 1040
For this purpose, figure qualified basis
*Generally, this is the amount of credit reported on
without regard to any additions to
Form 1120 “Other taxes” line in
line 1 of this Form 8611 reduced by the total
qualified basis after the first year of the
the Instructions for
low-income housing credits allowed on Form 8586
credit period. Compare any decrease in
Form 1120
or Form 3800 for each year.
qualified basis first to additions to
Special rule for electing large
qualified basis. Recapture applies only if
partnerships. Enter zero on line 9. An
the decrease in qualified basis exceeds
Special rule for electing large
electing large partnership is treated as
additions to qualified basis after the first
partnerships. Subtract the credit shown
having fully used all prior year credits.
year of the credit period.
on Form 8586 from the total of the line
Line 11. Compute the interest separately
If you disposed of the building or an 14 amounts from all Forms 8611. Enter
for each prior tax year for which a credit
ownership interest in it and did not the result (but not less than zero) on
is being recaptured. Interest must be
satisfy the requirements for avoiding Form 1065-B, Part I, line 26.
computed at the overpayment rate
recapture as outlined earlier under
Note. You must also reduce the current
determined under section 6621(a)(1) and
Building dispositions, you must
year low-income housing credit, before
compounded on a daily basis from the
recapture all of the accelerated portion
entering it on Schedules K and K-1, by
due date (not including extensions) of
shown on line 5. Enter 1.000 on line 6.
the amount of the reduction to the total
the return for the prior year until the
Note. If the decrease causes the of the recapture amounts.
earlier of (a) the due date (not including
qualified basis to fall below the minimum
extensions) of the return for the Line 15. Carry forward the low-income
set-aside requirements of section
recapture year, or (b) the date the return housing credit attributable to this
42(g)(1) (the 20-50 test or the 40-60
for the recapture year is filed and any building to the next tax year. Report any
test), then 100% of the amount shown
income tax due for that year has been carryforward attributable to buildings
on line 5 must be recaptured. Enter
fully paid. placed in service before 2008 on the
1.000 on line 6. If you elected the 40-60
carryforward line of Form 3800 for the
Tables of interest factors to compute
test for this building and the decrease
next tax year. Report any carryforward
daily compound interest were published
causes you to fall below 40%, you
attributable to buildings placed in service
in Rev. Proc. 95-17, 1995-1 C.B. 556.
cannot switch to the 20-50 test to meet
after 2007 on the carryforward line of
The interest rate in effect through March
the set-aside requirements. You must
Form 8586 for the next tax year. See the
31, 2009, is shown in Rev. Rul. 2008-54,
recapture the entire amount shown on
2008-52 I.R.B. 1352. For periods after
line 5.
Line 7—Example. $2,700 of accelerated portion of low-income housing credit spread over a 10-year period and not falling
below the minimum set-asides for the building. Also, there was a 20% reduction in qualified basis in Year 2 and 30% in Year 4.
Year 1 Year 2 Year 3 Year 4*
$216 ($270 × .8 (20% $189 ($270 × .7 (30%
Low-income housing $270 $270
credit reduction in qualified reduction in qualified
basis)) basis))
$18 ($270 × .333 × .2 $9 ($27 ($270 × .333 ×
Recapture of Year 1
low-income housing (20% reduction in .3 (30% reduction in
credit qualified basis)) qualified basis) minus
$18 Year 2 recapture))
* You will have to complete the rest of the form to figure the recapture as the result of the current year reduction in basis as it affects the Year 2 and Year 3 credit.

4. 4
Form 8611 (Rev. 1-2009) Page
instructions for Forms 8586 and 3800 for The time needed to complete and file
each partner on Schedule K-1 (Form
details on how to report the carryforward this form will vary depending on
1065) in the same manner as the
of unused credits. individual circumstances. The estimated
partnership’s taxable income is allocated
burden for individual taxpayers filing this
to each partner.
Lines 16 and 17. Only section 42(j)(5)
form is approved under OMB control
partnerships complete these lines. This
number 1545-0074 and is included in
Paperwork Reduction Act Notice. We
is a partnership (other than an electing
the estimates shown in the instructions
ask for the information on this form to
large partnership) that has at least 35
for their individual income tax return. The
carry out the Internal Revenue laws of
partners, unless the partnership elects
estimated burden for all other taxpayers
the United States. You are required to
(or has previously elected) not to be
who file this form is shown below.
give us the information. We need it to
treated as a section 42(j)(5) partnership.
ensure that you are complying with
For purposes of this definition, a Recordkeeping 8 hr., 21 min.
these laws and to allow us to figure and
husband and wife are treated as one
Learning about the
collect the right amount of tax.
partner.
law or the form 1 hr.
For purposes of determining the credit You are not required to provide the
Preparing and sending
recapture amount, a section 42(j)(5) information requested on a form that is
the form to the IRS 1 hr., 10 min.
partnership is treated as the taxpayer to subject to the Paperwork Reduction Act
which the low-income housing credit unless the form displays a valid OMB If you have comments concerning the
was allowed and as if the amount of control number. Books or records accuracy of these time estimates or
credit allowed was the entire amount relating to a form or its instructions must suggestions for making this form
allowable under section 42(a). be retained as long as their contents simpler, we would be happy to hear
See the instructions for line 11 to may become material in the from you. You can write to the IRS at
figure the interest on line 16. The administration of any Internal Revenue the address listed in the instructions for
partnership must attach Form 8611 to its law. Generally, tax returns and return the tax return with which this form is
Form 1065 and allocate this amount to information are confidential, as required filed.
by section 6103.