Instructions For Form 8582 - Passive Activity Loss Limitations

The exclusion from income of interest

you’re married filing a separate return

Name of Activity

Form or Schedule

from series EE and I U.S. savings bonds

and you and your spouse lived apart at

used to pay higher education expenses,

all times during the year.

Activity X

Sch E, line 28A

The exclusion of amounts received

Activity Y

Sch E, line 28A

Part IV—Total Losses

under an employer's adoption

assistance program, or

Allowed

The student loan interest deduction.

If the loss from an activity is reported in

Use Part IV to figure the amount of the

more than one place, identify both

At the time these instructions

losses from all passive activities (as

locations in the second column (for

went to print, the tuition and

determined in Part I) allowed for 2017.

example, Sch E, line 28A/Form 4797,

fees deduction that would've

Line 16. Use the worksheets on Form

line 2). If you need additional space,

CAUTION

been excluded in calculating modified

8582 and the following instructions for

show this information on an attached

adjusted gross income had expired. To

those worksheets to figure the

statement.

find out if legislation extended the

unallowed loss to be carried forward

deduction, go to

IRS.gov/FormsPubs

Enter all activities with overall losses

and the allowed loss to report on your

IRS.gov/Form8582.

from Worksheets 1 and 2 as follows.

forms and schedules for 2017.

If you entered an amount on line 10,

Include in modified adjusted gross

Worksheets 1, 2, and 3

list on Worksheet 4 all activities with an

income any portfolio income and

overall loss in column (e) of

Worksheets 1 and 3, columns (d) and

expenses that are clearly and directly

Worksheet 1.

(e), show whether an activity had an

allocable to portfolio income. Also

If you entered an amount on line 14,

overall gain or loss. Worksheet 2,

include any income that’s treated as

list on Worksheet 4 all activities with an

column (c), shows the CRDs from rental

nonpassive income, such as overall

overall loss in column (c) of

real estate activities. If you have

gain from a PTP and net income from an

Worksheet 2.

activities that show overall gain in

activity or item of property subject to the

If you entered amounts on both lines

column (d) of Worksheet 1 or 3, report

recharacterization of passive income

10 and 14 of Form 8582, you must

all the income and losses listed in

rules.

complete two separate Worksheets 4.

columns (a), (b), and (c) for those

When figuring modified adjusted

For the second worksheet, you either

activities on the proper forms and

gross income, include any overall loss

may attach an extra copy of page 2 of

schedules, including Form 8582.

from the entire disposition of a passive

Form 8582 or your own schedule in the

If you have activities that show an

activity (considered a nonpassive loss).

same format as Worksheet 4. On the

overall loss in column (e) of Worksheet

first Worksheet 4, list all activities with

Example. Your adjusted gross

1 or 3 or column (c) of Worksheet 2, you

an overall loss in column (e) of

income on line 37 of Form 1040 is

must allocate your allowed loss on

Worksheet 1. On the second Worksheet

$92,000, and you have taxable social

line 16 of Form 8582 to those activities

4, list all activities with an overall loss in

security benefits of $5,500 on line 20b.

by completing Worksheets 4, 5, and 6 or

column (c) of Worksheet 2.

Your modified adjusted gross income is

$86,500 ($92,000 – $5,500).

Column (a). Enter the overall loss from

Complete Worksheet 4 only if you

column (e) of Worksheet 1 or column (c)

Line 9. Don’t enter more than $12,500

entered an amount (other than zero) on

of Worksheet 2 for each activity.

on line 9 if you’re married filing a

line 10 or 14 of Form 8582. Otherwise,

separate return and you and your

Column (b). Divide each of the

skip Worksheet 4 and complete

spouse lived apart at all times during the

individual losses shown in column (a) by

Worksheet 5 for all activities in

year.

the total of all the losses in column (a)

Worksheet 1 or 3 that have overall

and enter this ratio for each activity in

Part III—Special Allowance

losses in column (e) and all activities in

column (b). The total of all the ratios in

Worksheet 2.

for Commercial

column (b) must equal 1.00.

Worksheet 4

Revitalization Deductions

Column (c). Multiply each ratio in

Use Worksheet 4 to allocate the special

From Rental Real Estate

column (b) by the amount on line 10 or

allowance on line 10 or line 14 of Form

line 14 of Form 8582, and enter the

Activities

8582 among your rental real estate

results in column (c). The total of

Use Part III to figure the maximum

activities.

column (c) must be the same as line 10

commercial revitalization deduction

or line 14 of Form 8582.

In the first column of Worksheet 4,

(CRD) allowed from a rental real estate

enter the name of each activity. In the

Column (c) total is the same as

activity.

second column, enter the form or

column (a) total. If the total losses in

Enter all numbers in Part III as

schedule and line number on which the

column (c) are the same as those in

loss will be reported.

positive amounts (that is, greater than

column (a), the losses in Worksheets 1

zero).

and 2 are allowed in full and aren’t

Example. You receive a

carried over to Worksheet 5. Report all

Schedule K-1 from partnership P that

Married persons filing separate

amounts in columns (a), (b), and (c) of

reports losses from two rental real

returns who lived with their

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

estate activities, Activity X and Activity

spouses at any time during the

CAUTION

Worksheet 2 on the proper forms and

Y. The losses from partnership P are

year aren’t eligible for the special

schedules.

reported on line 28A of Schedule E. In

allowance. They must enter -0- on

the first two columns of Worksheet 4,

line 14 and go to line 15.

enter:

Line 11. Enter $12,500 (reduced by the

amount, if any, on line 10) on line 11 if

-10-

Instructions for Form 8582 (2017)

Instructions For Form 8582 - Passive Activity Loss Limitations - 2017 Page 10

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