Prior Year Unallowed Credits

To figure this year's PAC, you must take into account any credits from passive activities disallowed for prior years and carried forward to this year.

If you had only one type of prior year unallowed credit from a single passive activity, figure your prior year unallowed credit by subtracting line 37 of your prior year Form 8582-CR from line 5 of your prior year Form 8582-CR.

Otherwise, your prior year unallowed credits are the amounts shown in column (b) of Worksheet 9 in the prior year Instructions for Form 8582-CR. Enter the prior year unallowed credits in column (b) of Worksheet 1, 2, 3, or 4, whichever applies.

Caution: You must adjust a prior year unallowed credit if you had to recapture any part of the credit (for example, due to the early disposition of property) or transfer the credit to a bankruptcy estate.