Part II. Tax Attributable to Net

Active Income

G. Enter amount from line E if Part I is

completed. Otherwise, enter income tax before credits from Form 1120, Schedule J, line 2* . . . . . . . .

H. Taxable income from Form

1120 . . . . . . . . . . . . . . . .

I. Net active income . . . . . . . . .

J. Net passive income or loss. See

instructions for line J . . . . . . .

Combine lines I and J. If less than

zero, enter as a negative amount . . . . . . . . . . . . . . .

Subtract line K from line H. If zero or

less, enter -0- here and on line M . . . . . . . . . . . . . . .

K. Combine lines I and J. If less than

L. Subtract line K from line H. If zero or

A. Income tax before credits from Form

tax on the line L amount as if it were the corporation's only taxable income . . . . . . . . . . . . . . .

1120, Schedule J, line 2* . . . . .

Taxable income from Form

1120 . . . . . . . . . . . . . . . .

less, enter -0- here and on line P . . . . . . . . . . . . . . . .

B. Taxable income from Form

N. Subtract line M from line G. If zero or

12 Instructions for Form 8810 (2025)

Worksheet 6—Allowed and Unallowed Credits Keep for Your Records

Use Worksheet 6 to allocate the allowed and unallowed credits for each activity.

Column (a). Enter the total credits from Worksheet 5, column (c).

Column (b). Divide each of the credits in column (a) by the total of all credits in column (a). The total of the ratios should equal 1.00.

Column (c). Multiply Form 8810, line 8, by the ratios in column (b) and enter the results in column (c). These are the unallowed credits for 2025. Keep a record of these amounts so the credits can be carried to the next year.

Column (d). Subtract column (c) from column (a). These are the allowed credits for 2025. The amounts in this column are generally reported on Form 3800. See Reporting Allowed Credits on Tax Return, later.

Reporting Allowed Credits on Tax Return

Form 3800. Include on the applicable line (3, 24, or 33) of Form 3800 each passive activity general business credit allowed from Worksheet 6, column (d).

Cooperatives. A closely held cooperative that is allocating part or all of a general business credit to patrons will show any allocation of the credit allowed from Worksheet 6, column (d), on the applicable lines of the separate credit forms.

Credits From PTPs A credit from a passive activity held through a PTP is allowed to the extent of the tax attributable to net passive income from that PTP. See Publicly Traded Partnerships (PTPs) , earlier, for the definition of a PTP.

Do not enter credits from PTPs on Form 8810 or the worksheets. Instead, use the following steps to figure the allowed and unallowed credits from passive activities held through PTPs.

1. Figure the tax attributable to net passive income for each PTP with current year passive activity credits or prior year unallowed credits.

2. Use the smaller of the tax attributable to net income from passive activities of the PTP or the credit (including

O. Enter the corporation's nonpassive

credits without regard to the tax liability limitations . . . . . . . . .

Tax attributable to net active income.

Subtract line O from line N . . . .

Tax attributable to net passive

income and net active income. Add lines F and P. Enter the result here and on Form 8810, line 7 . .

P. Tax attributable to net active income.

Q. Tax attributable to net passive

• Subtract any decrease in taxes due (negative amount) from Form 8978, Partner’s Additional Reporting Year Tax, included on Form 1120, Schedule J, line 5f, from the amount entered on lines A and G.

Computation for Line 7, Part I. This part is used by personal service corporations and closely held corporations with net passive income.

Computation for Line 7, Part II. This part is used by closely held corporations that have net active income. See the instructions for line 2, earlier, for the definition of net active income. If the corporation has both net passive income and net active income, complete Part I and Part II and enter the amount from line Q on Form 8810, line 7.

Note. When using taxable income in the computation for line 7, it is not necessary to refigure items based on taxable income, such as the contributions deduction, the dividends-received deduction, and the net operating loss deduction.

See the instructions for the tax return filed for information on how to figure tax.

Line C. Enter the net income, if any, from Form 8810, line 1d. If the corporation has an overall loss from the entire disposition of a passive activity, the amount to enter on line C is the net income from line 1d reduced by the overall loss, but not below zero. If the result is zero, skip the rest of the Part I computation.

Line J. If the corporation has net passive income, enter the amount from line C on this line. If the corporation has a net loss from Form 8810, line 1d, enter that amount on line J as a negative amount.

Line 9 If the corporation has one type of credit, the amount on line 9 is the credit allowed for the year. See Reporting Allowed Credits on Tax Return next.

If the corporation has more than one type of credit or has credits from more than one activity, use Worksheet 6 to figure how much of the credit on line 9 is allowed for each activity. Keep a record of the unallowed credit and the activity to which it belongs to figure the credit allowed next year.

Instructions for Form 8810 (2025) 13

prior year unallowed credits) from passive activities of the PTP as the amount allowed. Report the allowed credits on the forms normally used and keep a record of the unallowed credits to be carried to the next year.