Instructions For Form 8582 - 2016 (Page 14 of 14) in pdf

3. If you have an overall loss (but

Next, complete Worksheet 6 for each

subject to the Paperwork Reduction Act

didn’t dispose of your entire interest in

activity listed in Worksheet 5 if all the

unless the form displays a valid OMB

the PTP to an unrelated person in a fully

loss from that activity is reported on one

control number. Books or records

taxable transaction during the year), the

form or schedule. Use Worksheet 7

relating to a form or its instructions must

losses are allowed only to the extent of

instead of Worksheet 6 for each activity

be retained as long as their contents

the income, and the excess loss is

with losses reported on two or more

may become material in the

carried forward to use in a future year if

different forms or schedules (or are

administration of any Internal Revenue

you have income to offset it. Report as a

identified separately on the same form

law. Generally, tax returns and return

passive loss on the schedule or form

or schedule). Enter the net loss plus any

information are confidential, as required

you normally use the portion of the loss

prior year unallowed losses in column

by section 6103.

equal to the income. Report the income

(a) of Worksheet 6 (or line 1a, column

The time needed to complete and file

as passive income on the form or

(a), of Worksheet 7 if applicable). The

this form will vary depending on

schedule you normally use.

losses in column (c) of Worksheet 6

individual circumstances. The estimated

(column (e) of Worksheet 7) are the

Example. You have a Schedule E

burden for individual taxpayers filing this

allowed losses to report on your forms

loss of $12,000 (current year losses

form is approved under OMB control

or schedules. Report these losses and

plus prior year unallowed losses) and

number 1545-0074 and is included in

any income from the PTP on the forms

Form 4797 gain of $7,200 from the

the estimates shown in the instructions

and schedules normally used.

passive activities of a PTP. You report

for their individual income tax return.

the $7,200 gain on the appropriate line

4. If you have an overall loss and you

The estimated burden for all other

of Form 4797. On Schedule E, Part II,

disposed of your entire interest in the

taxpayers who file this form is shown

you report $7,200 of the losses as a

PTP to an unrelated person in a fully

below.

passive loss in column (f). You carry

taxable transaction during the year, your

forward the unallowed loss of $4,800

losses (including prior year unallowed

Recordkeeping

26 min.

. . . . . . .

losses) allocable to the activity for the

($12,000 − $7,200).

year aren’t limited by the passive loss

Learning about the law

If you have unallowed losses from

rules. A fully taxable transaction is one

or the form

22 min.

more than one activity of the PTP or

. . . . . . . . . .

in which you recognize all your realized

from the same activity of the PTP that

Preparing the form

1 hr., 52

. . . .

gain or loss. Report the income and

must be reported on different forms or

min.

losses on the forms and schedules

schedules, allocate the unallowed

normally used.

Copying, assembling,

losses on a pro rata basis to figure the

and sending the form

amount allowed for each activity or on

For rules on the disposition of an

to the IRS

48 min.

each form or schedule.

entire interest reported using the

. . . . . . . . . . .

installment method, see

Disposition of

To allocate and keep a record of

an Entire

Interest, earlier.

the unallowed losses, use

TIP

If you have comments concerning the

Worksheets 5, 6, and 7 of Form

Paperwork Reduction Act Notice.

accuracy of these time estimates or

8582.

We ask for the information on this form

suggestions for making this form

to carry out the Internal Revenue laws of

simpler, we would be happy to hear

List each activity of the PTP in

the United States. You are required to

from you. See the instructions for the tax

Worksheet 5. Enter the overall loss from

give us the information. We need it to

return with which this form is filed.

each activity in column (a). Complete

ensure that you are complying with

column (b) of Worksheet 5 according to

these laws and to allow us to figure and

its instructions. Multiply the total

collect the right amount of tax.

unallowed loss from the PTP by each

ratio in column (b) and enter the result in

You are not required to provide the

column (c) of Worksheet 5.

information requested on a form that is

Instructions for Form 8582 (2016)

Instructions For Form 8582 - 2016 Page 14

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