Part VI — Instruction 8582 — Instructions for Form

Use Part VI to allocate the special allowance on Part II, line 9, of Form 8582 among your rental real estate activities.

If you used the Worksheet in the instructions for line 9 to apply any remaining special allowance to prior-year unallowed CRD from one or more rental real estate activities, complete a separate Part VI to allocate that portion of the special allowance to those CRD activities.

In the first column of Part VI, enter the name of each activity. In the second column, enter the form or schedule and line number on which the loss will be reported.

Example. You receive a Schedule K-1 from partnership P that reports losses from two rental real estate activities, Activity X and Activity Y. The losses from partnership P are reported on line 28A of Schedule E. In the first two columns of Part VI, enter:

Name of activity Form or schedule

Activity X Sch E, line 28A

Activity Y Sch E, line 28A

If the loss from an activity is reported in more than one place, identify both locations in the second column (for example, Sch E, line 28A/Form 4797, line 2). If you need additional space, show this information on an attached statement.

If you entered an amount on Part II, line 9, and there is no amount included in line 9 from prior-year disallowed CRD, list in Part VI all activities with an overall loss in column (e) of Part IV.

If you also included an amount for prior-year unallowed CRD from rental real estate activities in line 9, complete another Part IV for these CRD activities. You can use another Part IV or your own schedule in the same format as Part IV. Enter the prior-year unallowed CRD for each activity in column (a) of the second Part IV. Then follow the instructions for column (b) and column (c) below for each Part IV.

Column (a). Enter the overall loss from column (e) of Part IV for each activity.

Column (b). Divide each of the individual losses shown in column (a) by the total of all the losses in column (a), and enter this ratio for each activity in column (b). The total of all the ratios in column (b) must equal 1.00.

Column (c). Multiply each ratio in column (b) by the amount on Part II, line 9, of Form 8582, if there is no prior-year unallowed CRD from rental real estate activities, and enter the results in column (c). The total of column (c) must be the same as Part II, line 9, of Form 8582.

If there is prior-year unallowed CRD included in Part II, line 9:

For the Part VI for rental real estate activities with active participation, multiply each ratio in column (b) by the lesser of line 4 or line 8; and
For the Part VI for prior-year unallowed CRD, multiply each ratio in column (b) by the amount from line D of the Worksheet in the instructions for line 9 above.

The total of column (c) for the Part VI for rental real estate activities with active participation should be the same as the lesser of line 4 or line 8, Part II, and the total of column (c) for the second Part VI for prior-year unallowed CRD should be the amount from line D of the Worksheet.

Column (c) total is the same as column (a) total. If the total losses in column (c) are the same as those in column (a), the losses in Part IV (or, in the case of the second Part VI for prior unallowed CRD, the additional amount listed in Part I, line 3) are allowed in full and aren’t carried over to Part VII. Report all amounts in columns (a), (b), and (c) of Part IV on the proper forms and schedules.

Column (c) total is less than column (a) total. If the total losses in column (c) are less than the total losses in column (a), complete column (d).

Column (d). Subtract column (c) from column (a) and enter the results in column (d). Also enter the amounts from column (d) of Part VI in column (a) of Part VII.

Part VII—Allocation of Unallowed Losses Complete Part VII if any activities have an overall loss in column (e) of Part V or losses in column (d) of Part VI (in column (e) of Part IV and any prior-year unallowed CRD included in Part I, line 3, if you didn’t have to complete Part VI).

On Part VII, enter the name of each activity and the form or schedule and line number on which the loss will be reported. See the Example for Part VI. If you have prior-year unallowed CRD from a passive activity other than rental real estate in Part V, and/or unallowed losses for prior-year CRD from a rental real estate activity in Part VI, column (d), add “CRD” after the name of each of the activities.

Column (a). Enter the amounts, if any, from column (d) of Part VI (from column (e) of Part IV and any prior-year unallowed CRD included in Part I, line 3, if you didn’t have to complete Part VI). Also enter the losses, if any, from column (e) of Part V.

Column (b). Divide each of the individual losses shown in column (a) by the total of all the losses in column (a) and enter this ratio for each activity in column (b). The total of all the ratios must equal 1.00.

12 Instructions for Form 8582 (2025)

Column (c). Complete the following computation.

A. Enter as a positive amount Part I, line 3, of

Form 8582 . . . . . . . . . . . . . . . . . . . .

B. Enter Part II, line 9, of Form 8582 . . . . . .

C. Subtract line B from line A . . . . . . . . . .

Multiply each ratio in column (b) by the amount on line C above, and enter the result in column (c).

Parts VIII and IX Parts VIII and IX figure your unallowed and allowed losses for each activity.

If you have losses from any activity that are reported on two or more different forms or schedules, use Part IX instead of Part VIII for that activity.

Also use Part IX instead of Part VIII for any activity with two or more transactions that are reported on the same form or schedule but must be separately identified for tax purposes. Transactions that must be separately identified include capital losses that are 28% rate losses and those that aren’t.

Note: 28% rate gain or loss includes all collectibles gains and deductible long-term losses and section 1202 gain on the sale of qualified small business stock. See the Instructions for Schedule D for details.

Part VIII—Allowed Losses

Use Part VIII for any activity listed in Part VII if all the loss from that activity is reported on one form or schedule and no transactions need to be identified separately (as discussed in Part IX, later). Also see Identification of Disallowed Passive Activity Deductions in Pub. 925 for more information.

Example. You will report all the allowed loss from an activity listed in Part VII on Schedule E. Use Part VIII to determine the allowed loss, even if part of the loss is a current year Schedule E loss and part of it is a prior-year unallowed Schedule E loss.

In Part VIII, enter the name of each activity and the form or schedule and line number on which the loss is reported. Identify each CRD from Part VII on a separate line of Part VIII and add "CRD" after the name of the activity. See the Example for Part VI.

Column (a). For each activity entered in Part VIII, enter the net loss plus the prior-year unallowed loss for the activity. Figure this amount by adding the losses in columns (b) and (c) of Parts IV and V and any prior-year unallowed CRD included in Part I, line 3.

Column (b). For each activity entered in Part VIII, enter the amount from column (c) of Part VII for the activity. These are your unallowed losses for 2025. Keep a record of these amounts so the losses can be used to figure your PAL next year.

Column (c). Subtract column (b) from column (a). These amounts are the losses allowed for 2025 under the

passive loss rules. Report the amounts in this column on the forms and schedules normally used, subject to any further limitations described in Coordination With Other Limitations , earlier.

See the forms and schedules listed under How To Report Allowed Losses, later.

Part IX—Activities With Losses Reported on Two or More Forms or Schedules

Use Part IX for any activity listed in Part VII that has losses that are reported on two or more different forms and schedules or are identified separately on the same form or schedule (for example, 28% rate and non-28%-rate capital losses reported on Form 8949). Part IX allocates the allowed and unallowed loss for the activity and allocates the allowed loss to the different forms or schedules (or where identified separately on the same form or schedule) used to report the losses.

Only losses that would cause a difference in tax liability if they were reported on a different form or schedule or are identified separately on the same form or schedule are kept separate. Those forms, schedules, and parts are the following.

Schedules C, E, and F.
Form 8949 (Parts I and II (28% rate losses and non-28%-rate losses)).

Note: You must generally make a separate entry in Form 8949, Part I or Part II, for each transaction reported. See the Instructions for Form 8949.

Forms 4684 (Section B), 4797 (Parts I and II), and

Use a separate copy of Part IX for each activity for which you have losses reported on two or more different forms or schedules or which are identified separately on the same form or schedule.

In Part IX, enter the form or schedule and line number on the dotted line above each line 1a (for example, Schedule D, line 12, to report a long-term capital loss from a partnership).

Line 1a, column (a). Enter the net loss plus any prior-year unallowed loss from the activity that’s reported on the same form or, in the case of Form 4797 and Form 8949, the same part. If you have a Form 8949 28% rate loss and a Form 8949 non-28%-rate loss, see Example of Form 8949 transactions, later, before completing Part IX.

Line 1b, column (a). Enter any net income from the activity that’s reported on the same form or schedule (or on the same part of the same form or schedule) as the loss on line 1a, column (a).

Example. You enter a prior-year unallowed loss from Form 4797, Part I, on line 1a. If the activity has a current year Form 4797, Part I, gain, enter the gain on line 1b, column (a). If the activity doesn’t have a Form 4797, Part I, gain, enter -0- on line 1b, column (a).

Column (b). Subtract line 1b, column (a), from line 1a, column (a), and enter the result in column (b). If line 1b,

Instructions for Form 8582 (2025) 13

column (a), is more than line 1a, column (a), enter -0- in column (b).

Column (c). Divide each of the losses entered in column (b) by the total of column (b) and enter the ratio in column (c). The total of this column must be 1.00.

Column (d). Multiply the unallowed loss for this activity, found in Part VII, column (c), by each ratio in column (c) of Part IX. If -0- is entered in column (b) of Part IX, also enter -0- for that form or schedule in column (d).

The amount in column (d) is the unallowed loss for 2025. Keep a record of Part IX so you can use the losses to figure your PAL next year.

Column (e). Subtract the amount in column (d) from the loss entered on line 1a, column (a). This amount is the loss allowed for 2025 under the passive loss rules. Report the amounts in this column on the forms or schedules normally used, subject to any further limitations described in Coordination With Other Limitations , earlier. The forms and schedules you use must show the losses from this column and the income, if any, for that activity from column (a) of Part IV or Part V.

Example of Form 8949 transactions. The taxpayer had the following Form 8949 transactions from passive activities in 2025.

Activity I A passive activity prior-year unallowed long-term capital loss (a 28% rate loss) of $1,000 and a current year long-term capital loss (a non-28%-rate loss) of $3,000.

Activity II A current year collectibles loss (a 28% rate loss) of $230 and net income of $1,100 from Schedule E (Form 1040). Part V Activity I has an overall loss of $4,000 (current year long-term capital loss of $3,000 and a prior-year unallowed long-term capital loss of $1,000). Activity II has an overall gain of $870 (current year net income of $1,100 less a current year long-term capital loss of $230). Part III, line 11, of Form 8582 shows an allowed loss of $1,100.

Since Activity II has an overall gain, the amounts shown in columns (a) and (b) of Part V for that activity are reported on the proper forms and schedules and aren’t shown in any other part.