Who Must File

Form 8582 is filed by individuals, estates, and trusts who have passive activity deductions (including prior year unallowed losses). However, you don’t have to file Form 8582 if you meet the following exception.

Exception You actively participated in rental real estate activities (see Special Allowance for Rental Real Estate Activities, later), and you meet all of the following conditions.

• Rental real estate activities with active participation were your only passive activities.

• You have no prior-year unallowed losses from these (or any other passive) activities.

• Your total loss from the rental real estate activities wasn’t more than $25,000 ($12,500 if married filing separately).

• If you’re married filing separately, you lived apart from your spouse all year.

• You have no current or prior-year unallowed credits from a passive activity.

• Your modified adjusted gross income (see the instructions for line 6, later) was not more than $100,000 ($50,000 if married filing separately).

Instructions for Form 8582 (2025) Catalog Number 64294A Nov 26, 2025 Department of the Treasury Internal Revenue Service www.irs.gov

If all the above conditions are met, your rental real estate losses are not limited, and you don’t need to complete Form 8582. Enter losses reported on Schedule E (Form 1040), Supplemental Income and Loss, Part I, line 21, on Schedule E (Form 1040), Part l, line 22. For losses from a partnership or an S corporation, enter the amount of the allowable loss from Schedule K-1 on Schedule E (Form 1040), Part II, column (g). Enter losses reported on line 32 of Form 4835, Farm Rental Income and Expenses, on Form 4835, line 34c.