Instructions For Form 8582 - 2010 (Page 8 of 13) in pdf

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separate activity if you can prove with

Example. A Schedule E rental

the tax year began in 2009,

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reasonable certainty:

activity has current year profit of $5,000

the building was placed in service in

and a Form 4797 gain of $2,000. You

2009, and

1. The prior year unallowed losses,

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enter $7,000 in column (a).

the qualified revitalization

if any, allocable to the part of the

expenditures were made in 2009.

activity disposed of, and

Column (b). Enter the current year net

Enter the total of column (a) on line 2a

2. The net income or loss for the

loss for each activity. Do not enter any

of Form 8582.

year of disposition allocable to the part

prior year unallowed losses in this

Column (b). Enter the prior year

of the activity disposed of.

column. Enter the total of column (b) on

unallowed CRDs for each rental real

line 1b of Form 8582.

estate activity. Enter the total of column

If an activity has net income on one

(b) on line 2b of Form 8582.

Specific Instructions

form or schedule and a net loss on

Column (c). Combine the amounts in

another form or schedule, report the net

columns (a) and (b) for each activity

amounts separately in columns (a) and

Part I—2010 Passive

and enter the overall loss for the activity

(b) of Worksheet 1.

in column (c). These amounts will be

Example. A Schedule E rental

Activity Loss

used when Form 8582 is completed to

activity has current year income of

figure the loss allowed for the current

Use Part I to combine the net income

$1,000 on line 22 of Schedule E and a

year.

and net loss from all passive activities

current year Form 4797 loss of $4,500.

to determine if you have a passive

You enter $1,000 in column (a) and

Worksheet 3

activity loss (PAL) for 2010. Use

($4,500) in column (b).

Use Worksheet 3 to figure the amounts

Worksheets 1, 2, and 3 to determine

Column (c). Enter the prior year

to enter on lines 3a through 3c for:

the entries for lines 1 – 3 of Part I, as

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unallowed losses for each activity. You

Passive trade or business activities,

follows.

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find these amounts on Worksheet 5,

Passive rental real estate activities

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Worksheet 1 is used for rental real

column (c), of your 2009 Form 8582.

that do not qualify for the special

estate activities with active

Enter the total of column (c) from your

allowance (but do not include CRDs

participation.

2010 Worksheet 1 on line 1c of Form

reported in Worksheet 2), and

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Worksheet 2 is used for commercial

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8582.

Rental activities other than rental real

revitalization deductions (CRDs) from

estate activities.

Columns (d) and (e). Combine

rental real estate activities (with or

income and losses in columns (a)

Column (a). Enter the current year

without active participation).

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through (c) for each activity, and either

net income for each activity. Enter the

Worksheet 3 is used for all other

enter the overall gain for the activity in

total of column (a) on line 3a of Form

passive activities.

column (d) or enter the overall loss for

8582. (See the example under Column

See Pub. 925 for examples showing

the activity in column (e). Do not enter

(a) for Worksheet 1, on this page.)

how to complete the worksheets.

amounts from columns (d) and (e) on

Column (b). Enter the current year net

Form 8582. These amounts will be

If you need additional lines for

loss for each activity. Enter the total of

used when Form 8582 is completed to

any of the worksheets, you can

TIP

column (b) on line 3b of Form 8582.

figure the loss allowed for the current

either attach copies of page 2 or

(See the example under Column (b) for

year.

3, whichever is applicable, or your own

Worksheet 1, on this page.)

schedule that is in the same format as

Worksheet 2

Column (c). Enter the unallowed

the worksheet.

losses for the prior years for each

Use Worksheet 2 to figure the amount

activity. You find these amounts on

Worksheet 1

to enter on lines 2a and 2b for

Worksheet 5, column (c), of your 2009

commercial revitalization deductions

Individuals and qualifying estates who

Form 8582. Enter the total of column

(CRD) from rental real estate activities

actively participated in rental real estate

(see Commercial revitalization

activities must include the income or

line 3c of Form 8582.

deduction (CRD) on page 4).

loss from those activities in Worksheet

Columns (d) and (e). Combine

1 to figure the amounts to enter on lines

You cannot claim a CRD for a

income and losses in columns (a)

1a through 1c of Form 8582. Do not

building placed in service after

through (c) for each activity, and either

include any commercial revitalization

December 31, 2009.

enter the overall gain for the activity in

CAUTION

deductions (CRDs) from these activities

column (d) or enter the overall loss for

Do not include the following amounts

in the net income or loss reported in

the activity in column (e). Do not enter

on Worksheet 2.

Worksheet 1.

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amounts from columns (d) and (e) on

Income or other deductions from the

Do not enter a prior year unallowed

Form 8582. These amounts will be

same activity. Instead, report any net

loss in column (c) of Worksheet 1

used when Form 8582 is completed to

income or net loss from the activity,

unless you actively participated in the

figure the loss allowed for the current

except for the CRD, in Worksheet 1 if

activity in both the year the loss arose

year.

you actively participated in the activity

and the current tax year. If you did not

or in Worksheet 3 if you did not actively

Part II—Special

actively participate in both years, enter

participate.

the prior year unallowed loss in column

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CRDs from passive activities other

Allowance for Rental

than rental real estate activities.

Real Estate Activities

Married individuals who file

Instead, report these deductions as part

of the net income or loss from the

separate returns and lived with

With Active Participation

their spouses at any time during

passive activity in Worksheet 3.

CAUTION

the tax year do not qualify under the

Use Part II to figure the maximum

Column (a). Enter the current year

active participation rule and must use

amount of rental loss allowed if you

CRD from each rental real estate

Worksheet 3 instead of Worksheet 1.

have a net loss from a rental real estate

activity. You can claim a current year

activity with active participation.

Column (a). Enter the current year net

CRD for 2010, only if you were a

income from each activity. Enter the

partner or shareholder in a

Enter all numbers in Part II as

total of column (a) on line 1a of Form

pass-through entity that uses a fiscal

positive amounts (that is, greater than

8582.

year and

zero).

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Instructions for Form 8582 (2010)

Instructions For Form 8582 - 2010 Page 8

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