Instructions For Form 8582 - 2010 printable pdf download

2010

Department of the Treasury

Internal Revenue Service

Instructions for Form 8582

Passive Activity Loss Limitations

•

Section references are to the Internal

8810, Corporate Passive Activity Loss

Your modified adjusted gross income

and Credit Limitations.

was not more than $100,000 (not more

Revenue Code unless otherwise noted.

than $50,000 if married filing separately

Who Must File

and you lived apart from your spouse

What’s New

all year).

Form 8582 is filed by individuals,

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You do not hold any interest in a

estates, and trusts who have losses

rental real estate activity as a limited

Commercial revitalization deduction

(including prior year unallowed losses)

partner or as a beneficiary of an estate

(CRD). CRDs for rental real estate

from passive activities. You do not have

or a trust.

activities are not allowed for buildings

to file Form 8582 if you meet Exception

placed in service after December 31,

For the definition of modified

1 or 2 below.

2009. See Commercial revitalization

adjusted gross income, see the

deduction (CRD) on page 4.

Exception 1

instructions for line 7 on page 9.

Disclosure requirements for

You do not have an overall loss when

If all the above conditions are met,

groupings. For tax years beginning

you combine all your net income and

your rental real estate losses are not

after January 24, 2010, disclosure

net losses (including any prior year

limited, and you do not need to

requirements for groupings of trade or

unallowed losses) from business or

complete Form 8582. Enter losses

business activities or rental activities

rental passive activities. Overall loss is

reported on Schedule E (Form 1040),

apply. See Disclosure Requirement on

defined under Definitions on page 2.

Supplemental Income and Loss, Part I,

page 5.

line 22, on Schedule E (Form 1040),

In figuring your overall gain or loss

Part l, line 23. For losses from a

General Instructions

from all passive activities for the year,

partnership or an S corporation, enter

do not include the following income or

the amount of the allowable loss from

losses.

Schedule K-1 in Schedule E (Form

Purpose of Form

1. Net income that is not passive

1040), Part II, column (f). Enter losses

activity income. See Passive Activity

Form 8582 is used by noncorporate

reported on line 32 of Form 4835, Farm

Income and Deductions beginning on

taxpayers to figure the amount of any

Rental Income and Expenses, on Form

page 5.

passive activity loss (PAL) for the

4835, line 33c.

2. Net losses that are not passive

current tax year.

activity net losses. See Activities That

Coordination With Other

A PAL occurs when total losses

Are Not Passive Activities on page 2.

(including prior year unallowed losses)

Limitations

3. Net income or net loss from your

from all your passive activities exceed

interest in any publicly traded

the total income from all your passive

Generally, PALs are subject to other

partnership (PTP). See Publicly Traded

activities.

limitations (for example, basis and

Partnerships (PTPs) beginning on

at-risk limitations) before they are

Generally, passive activities include:

page 12.

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subject to the passive loss limitations.

Trade or business activities in which

4. Any overall loss from an entire

Once a loss becomes allowable under

you did not materially participate for the

disposition of a passive activity. See

these other limitations, you must

tax year.

Dispositions on page 7 for more

•

determine whether the loss is limited

Rental activities, regardless of your

information.

under the passive loss rules. See Form

participation.

6198, At-Risk Limitations, for details on

PALs cannot be used to offset

Exception 2

the at-risk rules. Also, capital losses

income from nonpassive activities.

that are allowable under the passive

You actively participated in rental real

However, a special allowance for rental

loss rules may be limited under the

estate activities (see Special Allowance

real estate activities may allow some

capital loss limitations of section 1211.

for Rental Real Estate Activities

losses even if the losses exceed

Percentage depletion deductions that

beginning on page 3), and you meet all

passive income.

are allowable under the passive loss

of the following conditions.

PALs not allowed in the current year

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rules may be limited under section

Rental real estate activities with

are carried forward until they are

613A(d).

active participation were your only

allowed either against passive activity

passive activities.

income, against the special allowance,

Before Completing Form

•

You have no prior year unallowed

if applicable, or when you sell or

losses from these activities.

8582

exchange your entire interest in the

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Your total loss from the rental real

activity in a fully taxable transaction to

estate activities was not more than

To find out if your activity is treated as a

an unrelated party.

$25,000 ($12,500 if married filing

passive activity, read the following

For more information, see Pub. 925,

separately and you lived apart from

sections of these instructions.

•

Passive Activity and At-Risk Rules,

your spouse all year).

Trade or Business Activities if your

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which contains a filled-in example of

If you are married filing separately,

activity is a trade or business activity

Form 8582 with step-by-step

you lived apart from your spouse all

(page 3).

•

instructions for reporting losses from

year.

Rental Activities if your activity is the

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passive activities.

You have no current or prior year

renting of tangible property (page 2).

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Note. Corporations subject to the

unallowed credits from a passive

Material Participation (page 4).

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passive activity rules must use Form

activity.

Grouping of Activities (page 5).

Cat. No. 64294A

Instructions For Form 8582 - 2010

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