Passive Activity Losses - Uncle Fed's Tax*Board

Exhibit 1.2: FORM 8582 – Line by Line Comments (Tax year 2003 and
subsequent years)
Rental Real Estate With Active Participation
1a Net rental real estate income, but no interest, dividends, gains on stocks &
bonds. Gain on disposition of rental property generally is also passive income.
While interest income generally is not passive income, self-charged interest
income may be passive income (Reg. § 1.469-7).
1b Net rental real estate losses.
Exception: No limited partners or Schedule K-1s, Partner’s Shares of
Income, Credits, Deductions, etc., with less than 10 percent ownership.
1c Prior year rental real estate losses from last year’s Form 8582 W/S 6.
1d Sum of lines 1a, 1b and 1c.
Commercial Revitalization Deduction
2a Commercial revitalization deductions (generally from Schedule K-1s)
2b Prior year unallowed commercial revitalization deductions
2c Sum of 2a and 2b
All Other Passive Activities
3a Net income/gain from all other passive activities, but no interest, dividends,
gains on stocks and bonds.
3b Includes equipment leases, Form 1065, U.S. Return of Partnership Income
and Form 1120S, U.S. Income Tax Return for an S Corporation, businesses in
which Taxpayer does not materially participate, and many vacation condos.
3c Prior year losses from all other passive activities form last year’s Form 8582
W/S 5.
3d Sum of line 3a, 3b and 3c.
Special Allowance (Commonly called the $25,000 offset)
7 MAGI: If no loss on line 1d OR MAGI is over $150,000 enter $150,000 here.
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