Part III. Election To Increase Basis of Credit Property

Line 10 Check the box on this line if the corporation elects to increase the basis of credit property it used in a passive activity or former passive activity by the unallowed credit that reduced the property's basis.

The election is available for a fully taxable disposition of an entire interest in an activity for which a basis adjustment was made as a result of placing in service property for which a credit was taken. The corporation can elect to increase the basis of the credit property immediately before the disposition (by an amount no greater than the amount of the original basis

reduction) to the extent that the credit has not previously been allowed because of the passive credit limitations. The amount of the unallowed credit that can then be applied against tax is reduced by the amount of the basis adjustment. Once the election is made, it is irrevocable.

No basis adjustment can be elected on a partial disposition of the corporation's interest in a passive activity or if the disposition is not fully taxable. The amount of any unallowed credit; however, may remain available to offset the tax attributable to net passive and net active income.

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14 Instructions for Form 8810 (2025)