Instructions For Form 8582-Cr (Rev. December 2009)


Instructions for Form
Department of the Treasury
Internal Revenue Service
(Rev. December 2009)
Passive Activity Credit Limitations
general overview of how the form
3. A working interest in an oil or
Section references are to the Internal
Revenue Code unless otherwise noted.
gas well. Your working interest must
be held directly or through an entity
General Instructions
Also, as you read the instructions
that does not limit your liability (such
that follow, see Example of How To
as a general partner interest in a
Complete Form 8582-CR, beginning
Purpose of Form
partnership). In this case, it does not
on page 5. The example goes
matter whether you materially
Form 8582-CR is used by
through a six-step analysis of how the
participated in the activity for the tax
noncorporate taxpayers to figure the
form and worksheets are completed
amount of any passive activity credit
for a partner in a limited partnership
If, however, your liability was
(PAC) for the current tax year
that has a low-income housing credit.
limited for part of the year (for
(including any prior year unallowed
example, you converted your general
credits) and the amount of credit
Activities That Are Not
partner interest to a limited partner
allowed for the current year. It also is
interest during the year), some of
used to make the election to increase
Passive Activities
your income and losses from the
the basis of credit property when a
The following are not passive
working interest may be treated as
taxpayer disposes of his or her
passive activity gross income and
interest in an activity.
1. Trade or business activities in
passive activity deductions. See
PACs that are not allowed in the
which you materially participated for
Temporary Regulations section
current year are carried forward until
the tax year.
they are allowed against the tax on
4. The rental of a dwelling unit you
2. Any rental real estate activity in
either net passive income or the
used as a residence if section
which you materially participated if
special allowance, if applicable.
280A(c)(5) applies. This section
you were a “real estate professional”
Different rules apply to your
applies if you rented out a dwelling
for the tax year. You were a real
activities and the related credit,
unit that you also used as a home
estate professional only if:
depending on the type of activity.
during the year for a number of days
a. More than half of the personal
Generally, passive activities include:
that exceeds the greater of 14 days
services you performed in trades or
Trade or business activities in
or 10% of the number of days during
businesses during the tax year were
which you did not materially
the year that the home was rented at
performed in real property trades or
participate for the tax year.
a fair rental.
businesses in which you materially
Rental activities, regardless of your
5. An activity of trading personal
participated, and
property for the account of owners of
b. You performed more than 750
See Trade or Business Activities
interests in the activity. For purposes
hours of services during the tax year
on page 3 and Rental Activities on
of this rule, personal property means
in real property trades or businesses
this page.
property that is actively traded, such
in which you materially participated.
as stocks, bonds, and other
For more information, see Pub.
For purposes of item (2), each
securities. See Temporary
925, Passive Activity and At-Risk
interest in rental real estate is a
Regulations section 1.469-1T(e)(6).
separate activity unless you elect to
treat all interests in rental real estate
Note. Corporations subject to the
Generally, credits from these
as one activity.
passive activity rules must use Form
activities are not entered on Form
8810, Corporate Passive Activity
If you are married filing jointly, one
8582-CR. However, credits from
Loss and Credit Limitations.
spouse must separately meet both
these activities may be subject to
(2)(a) and (2)(b) without taking into
limitations other than the passive
Who Must File
account services performed by the
credit limitation rules.
other spouse.
Form 8582-CR is filed by individuals,
estates, and trusts with any of the
A real property trade or business is
Rental Activities
following credits from passive
any real property development,
A rental activity is a passive activity
redevelopment, construction,
even if you materially participated in
General business credits.
reconstruction, acquisition,
the activity (unless it is a rental real
Qualified plug-in electric and
conversion, rental, operation,
estate activity in which you materially
electric vehicle credit.
management, leasing, or brokerage
participated and you were a real
trade or business.
estate professional).
Overview of Form
Services you performed as an
The form contains six parts. The
employee are not treated as
However, if you meet any of the
Specific Instructions, starting on page
performed in a real property trade or
five exceptions listed below, the
8, include, at the beginning of the
business unless you owned more
rental of the property is not treated as
instructions for each part, a brief
than 5% of the stock (or more than
a rental activity. See Reporting
explanation of the purpose or use of
5% of the capital or profits interest) in
Credits From the Activities on page 2
that part. These explanations give a
the employer.
if you meet any of the exceptions.
Cat. No. 64649B


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