Part IV — Instruction 8582 — Instructions for Form

Individuals and qualifying estates who actively participated in rental real estate activities must include the income or loss from those activities in Part IV to figure the amounts to enter on Part I, lines 1a through 1c, of Form 8582.

Don’t enter a prior-year unallowed loss in column (c) of Part IV unless you actively participated in the activity in both the year the loss arose and the current tax year. If you didn’t actively participate in both years, enter the prior-year unallowed loss in column (c) of Part V.

Caution: Married individuals who file separate returns and lived with their spouses at any time during the tax year don’t qualify under the active participation rule and must use Part V instead of Part IV.

Column (a). Enter the current year net income from each activity. Enter the total of column (a) on Part I, line 1a, of Form 8582.

Example. A Schedule E rental activity has current year profit of $5,000 and a Form 4797 gain of $2,000. You enter $7,000 in column (a).

Column (b). Enter the current year net loss for each activity. Don’t enter any prior-year unallowed losses in this column. Enter the total of column (b) on Part I, line 1b, of Form 8582.

If an activity has net income on one form or schedule and a net loss on another form or schedule, report the net amounts separately in columns (a) and (b) of Part IV.

Example. A Schedule E rental activity has current year income of $1,000 on line 21 of Schedule E and a current year Form 4797 loss of $4,500. You enter $1,000 in column (a) and $4,500 in column (b).

Column (c). Enter the prior-year unallowed losses for each activity. You find these amounts in Part VII, column (c), of your 2024 Form 8582. Enter the total of column (c) from your 2025 Part IV on Part I, line 1c, of Form 8582.

Columns (d) and (e). Combine income and losses in columns (a) through (c) for each activity, and either enter the overall gain for the activity in column (d) or enter the overall loss for the activity in column (e). Don’t enter amounts from columns (d) and (e) in Part I, II, or III of Form 8582. These amounts will be used when the rest of Form

8582 is completed to figure the loss allowed for the current year.