Instructions For Form 8582 - Passive Activity Loss Limitations

Column (c) total is less than

Also use Worksheet 7 instead of

See the forms and schedules listed

column (a) total. If the total losses in

Worksheet 6 for any activity with two or

under

How To Report Allowed

Losses,

column (c) are less than the total losses

more transactions that are reported on

later.

in column (a), complete column (d).

the same form or schedule but must be

separately identified for tax purposes.

Worksheet 7

Column (d). Subtract column (c) from

Transactions that must be separately

column (a) and enter the results in

Use Worksheet 7 for any activity listed

identified include capital losses that are

column (d). Also enter the amounts from

in Worksheet 5 that has losses that are

28% rate losses and those that aren’t.

column (d) of Worksheet 4 in column (a)

reported on two or more different forms

of Worksheet 5.

and schedules or are identified

Note. 28% rate gain or loss includes all

separately on the same form or

collectibles gains and deductible

Worksheet 5

schedule (for example, 28% rate and

long-term losses and section 1202 gain

Complete Worksheet 5 if any activities

non-28%-rate capital losses reported on

on the sale of qualified small business

have an overall loss in column (e) of

Form 8949). Worksheet 7 allocates the

stock. See the Instructions for

Worksheet 3 or losses in column (d) of

allowed and unallowed loss for the

Schedule D for details.

Worksheet 4 (in column (e) of

activity and allocates the allowed loss to

Worksheet 1 or column (c) of

the different forms or schedules (or

Worksheet 6

Worksheet 2 if you didn’t have to

where identified separately on the same

complete Worksheet 4).

Use Worksheet 6 for any activity listed

form or schedule) used to report the

in Worksheet 5 if all the loss from that

On Worksheet 5, enter the name of

losses.

activity is reported on one form or

each activity and the form or schedule

schedule and no transactions need to

and line number on which the loss will

Only losses that would cause a

be identified separately (as discussed in

be reported. See the

Example

for

difference in tax liability if they were

Worksheet

7, later). Also, see

Worksheet 4. Identify any deduction

reported on a different form or schedule

Identification of Disallowed Passive

from Worksheet 2 on a separate line

or are identified separately on the same

Activity Deductions in Pub. 925 for more

(even if the amount is from an activity

form or schedule are kept separate.

information.

also shown on Worksheet 1 or 3) and

Those forms, schedules, and parts are

add “CRD” after the name of the activity.

the following.

Example. You will report all the

Schedules C, E, and F.

allowed loss from an activity listed in

Column (a). Enter the amounts, if any,

Form 8949 (Parts I and II (28% rate

Worksheet 5 on Schedule E. Use

from column (d) of Worksheet 4 (from

losses and non-28%-rate losses)).

Worksheet 6 to determine the allowed

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

loss, even if part of the loss is a current

of Worksheet 2 if you didn’t have to

Note. You must generally make a

year Schedule E loss and part of it is a

complete Worksheet 4). Also enter the

separate entry in Form 8949, Part I or

prior year unallowed Schedule E loss.

losses, if any, from column (e) of

Part II, for each transaction reported.

Worksheet 3.

See the Instructions for Form 8949.

On Worksheet 6, enter the name of

Column (b). Divide each of the

Forms 4684 (Section B), 4797

each activity and the form or schedule

individual losses shown in column (a) by

(Parts I and II), and 4835.

and line number on which the loss is

the total of all the losses in column (a)

reported. See the

Example

for

and enter this ratio for each activity in

Worksheet 4. Identify each CRD from

Use a separate copy of Worksheet 7

column (b). The total of all the ratios

Worksheet 5 on a separate line and add

for each activity for which you have

must equal 1.00.

“CRD” after the name of the activity.

losses reported on two or more different

forms or schedules or which are

Column (c). Complete the following

Column (a). For each activity entered

identified separately on the same form

computation.

in Worksheet 6, enter the net loss plus

or schedule.

the prior year unallowed loss for the

activity. Figure this amount by adding

A. Enter as a positive amount

On Worksheet 7, enter the form or

the losses in columns (b) and (c) of

line 4 of Form 8582

. . .

schedule and line number on the dotted

Worksheets 1 and 3 or enter the loss

B. Add lines 10 and 14 of

line above each line 1a (for example,

from column (c) of Worksheet 2.

Form 8582

. . . . . . . . .

Schedule D, line 12, to report a 28%

Column (b). For each activity entered

rate loss from a partnership).

C. Subtract line B from

in Worksheet 6, enter the amount from

line A

. . . . . . . . . . . .

Line 1a, column (a). Enter the net loss

column (c) of Worksheet 5 for the

plus any prior year unallowed loss from

activity. These are your unallowed

the activity that’s reported on the same

losses for 2017. Keep a record of these

Multiply each ratio in column (b) by

form or, in the case of Form 4797 and

amounts so the losses can be used to

the amount on line C above, and enter

Form 8949, the same part.

figure your PAL next year.

the result in column (c).

If you have a Form 8949 28% rate

Worksheets 6 and 7

Column (c). Subtract column (b) from

loss and a Form 8949 non-28%-rate

column (a). These amounts are the

These worksheets figure your

loss, see

Example of Form 8949

losses allowed for 2017 under the

unallowed and allowed losses for each

transactions, later, before completing

passive loss rules. Report the amounts

activity.

Worksheet 7.

in this column on the forms and

If you have losses from any activity

schedules normally used, subject to any

Line 1b, column (a). Enter any net

that are reported on two or more

further limitations described in

income from the activity that’s reported

different forms or schedules, use

Coordination With Other

Limitations,

on the same form or schedule (or on the

Worksheet 7 instead of Worksheet 6 for

earlier.

same part of the same form or

that activity.

Instructions for Form 8582 (2017)

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Instructions For Form 8582 - Passive Activity Loss Limitations - 2017 Page 11

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