Instructions For Form 8582 - Department Of The Treasury

income or net loss from the activity

Example. A Schedule C activity

2000 Form 8582. Enter the total of

for the current year.

has current year profit of $5,000 and

column (c) from your 2001 Worksheet

a Form 4797 gain of $2,000. You

2 on line 2c of Form 8582.

Note: A disposition of less than

enter $7,000 in column (a).

Columns (d) and (e). Combine

substantially all of an entire interest

income and losses in columns (a)

Column (b). Enter the current year

does not trigger the allowance of

through (c) for each activity, and

prior year unallowed losses.

net loss for each activity. Do not enter

either enter the overall gain for the

any prior year unallowed losses in

Disposition of substantially all of

activity in column (d) or enter the

this column. Enter the total of column

an activity. You may treat the

overall loss for the activity in column

(b) on line 1b of Form 8582.

disposition of substantially all of an

(e). Do not enter amounts from

activity as a separate activity if you

If an activity has net income on

columns (d) and (e) on Form 8582.

one form or schedule and a net loss

can prove with reasonable certainty:

These amounts will be used when

on another form or schedule, report

1. The prior year unallowed

Form 8582 is completed to figure the

the net amounts separately in

losses, if any, allocable to the part of

loss allowed for the current year.

columns (a) and (b) of Worksheet 1.

the activity disposed of and

2. The net income or loss for the

Part II — Special

Example. A Schedule E rental

year of disposition allocable to the

activity has current year income of

Allowance for Rental

part of the activity disposed of.

$1,000 on line 22 of Schedule E and

a current year Form 4797 loss of

Real Estate With Active

$4,500. You enter $1,000 in column

Participation

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

Specific Instructions

Use Part II to figure the maximum

Column (c). Enter the prior year

amount of rental loss allowed if you

unallowed losses for each activity.

have a net loss from a rental real

You find these amounts on

Part I — 2001 Passive

estate activity with active

Worksheet 4, column (c), of your

participation.

2000 Form 8582. Enter the total of

Activity Loss (PAL)

column (c) from your 2001 Worksheet

Enter all numbers in Part II as

Use Part I to combine the net income

1 on line 1c of Form 8582.

positive amounts (that is, greater than

and net loss from all passive activities

zero).

Columns (d) and (e). Combine

to determine if you have a PAL for

income and losses in columns (a)

Examples.

2001.

through (c) for each activity, and

1. Line 1d has a loss of $47,000

either enter the overall gain for the

Note: See Pub. 925 for examples

and line 3 has a loss of $42,000. You

activity in column (d) or enter the

showing how to complete the

enter $42,000 as a positive number

worksheets.

overall loss for the activity in column

on line 4.

(e). Do not enter amounts from

2. Line 4 has a loss of $42,000

Worksheet 1

columns (d) and (e) on Form 8582.

and line 8 is $25,000. You enter

These amounts will be used when

Individuals and qualifying estates who

$25,000 as a positive number on line

Form 8582 is completed to figure the

actively participated in rental real

loss allowed for the current year.

estate activities must include the

income or loss from those activities in

Line 5. Married persons filing

Worksheet 2

Worksheet 1 to figure the amounts to

separate returns who lived apart from

Use Worksheet 2 to figure the

enter on lines 1a through 1c of Form

their spouses at all times during the

amounts to enter on lines 2a through

8582. Use Worksheet 2 to figure the

year must enter $75,000 on line 5

2c for:

amounts to enter on lines 2a through

instead of $150,000. Married persons

2c if you did not actively participate

1. Passive trade or business

filing separate returns who lived with

in a rental real estate activity.

activities,

their spouses at any time during the

2. Passive rental real estate

year are not eligible for the special

Note: Do not enter a prior year

activities that do not qualify for the

allowance. They must enter zero on

unallowed loss in column (c) of

special allowance, and

line 9 and go to line 10.

Worksheet 1 unless you actively

3. Rental activities other than

Line 6. To figure modified adjusted

participated in the activity in both the

rental real estate activities.

gross income, combine all the

year the loss arose and the current

tax year. If you did not actively

amounts used to figure adjusted

Column (a). Enter the current year

gross income except:

participate in both years, enter the

net income for each activity. Enter the

•

Passive income or loss included on

prior year unallowed loss in column

total of column (a) on line 2a of Form

Form 8582;

8582. (See the example in the

•

Any rental real estate loss allowed

Married individuals who file

instructions under column (a) for

under section 469(c)(7) to real estate

separate returns and lived

Worksheet 1, above.)

professionals (defined under

with their spouses at any time

CAUTION

Column (b). Enter the current year

Activities That Are Not Passive

during the tax year do not qualify

net loss for each activity. Enter the

Activities on page 2);

under the active participation rule and

•

total of column (b) on line 2b of Form

Any overall loss from a PTP;

must use Worksheet 2 instead of

•

8582. (See the example in the

The taxable amount of social

Worksheet 1.

instructions under column (b) of

security and tier 1 railroad retirement

Worksheet 1, above.)

benefits;

•

Column (a). Enter the current year

Column (c). Enter the unallowed

The deduction allowed under

net income from each activity. Enter

losses for the prior years for each

section 219 for contributions to IRAs

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

activity. You find these amounts on

and certain other qualified retirement

Form 8582.

Worksheet 4, column (c), of your

plans;

-8-

Instructions For Form 8582 - Department Of The Treasury - 2001 Page 8

Related Articles

Related forms

Related Categories