Part VI—Election To Increase Basis of Credit Property

Complete Part VI if you disposed of your entire interest in a passive activity and elect to increase the basis of the credit property used in the activity by the unallowed credit that reduced the basis of the property.

Line 38. Check the box if you elect to increase the basis of credit property used in a passive activity by the unallowed credit that reduced the property's basis. The election is available for a fully taxable disposition of an entire interest in an activity for which a basis adjustment was made as a result of placing in service property for which a credit was taken. You may elect to increase the basis of the credit property immediately before the disposition (by an amount no greater than the amount of the original basis reduction) to the extent that the credit hadn’t been allowed previously because of the passive activity credit limitations. The amount of the unallowed credit that may be applied against tax is reduced by the amount of the basis adjustment.

No basis adjustment may be elected on a partial disposition of your interest in a passive activity. See the exception in Partial disposition of an activity , earlier. No basis adjustment may be elected if the disposition isn’t fully taxable or if the disposition was to a related party. The

14 Instructions for Form 8582-CR (Rev. 12-2025)

amount of any unallowed credit, however, remains available to offset the tax attributable to net passive income.

Paperwork Reduction Act Notice. We ask for the information on this form to carry out the Internal Revenue laws of the United States. You are required to give us the information. We need it to ensure that you are complying with these laws and to allow us to figure and collect the right amount of tax.

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burden for individual taxpayers filing this form is approved under OMB control number 1545-0074 and is included in the estimates shown in the instructions for their individual income tax return. The estimated burden for all other taxpayers who file this form is shown below.

Recordkeeping . . . . . . . . . . . . . . . . 2 hr., 4 min.

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Preparing the form . . . . . . . . . . . . . 4 hr., 19 min.

Copying, assembling, and sending the form to the IRS . . . . . . . . . . . . . 1 hr., 9 min.

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Instructions for Form 8582-CR (Rev. 12-2025) 15