About Form 8582-CR, Passive Activity Credit Limitations-2025

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An individual shall not be treated as actively participating with respect to any interest in any rental real estate activity for any period if, at any time during such period, such interest (including any interest of the spouse of the individual) is less than 10 percent (by value) of all interests in such activity.
$25,000 for single individuals and married individuals filing a joint return for the tax year. $12,500 for married individuals who file separate returns for the tax year and lived apart from their spouses at all times during the tax year.
Special $25,000 allowance. This special allowance is an exception to the general rule disallowing the passive activity loss. Similarly, you can offset credits from the activity against the tax on up to $25,000 of nonpassive income after taking into account any losses allowed under this exception.
Form 8582-CR is used by noncorporate taxpayers to figure the amount of any passive activity credit (PAC) for the current tax year (including any prior year unallowed credits) and the amount of credit allowed for the current year.
The answer is yes. You can carry forward those losses until the entire amount is used up.
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People also ask

If youre not a real estate professional, a special rule lets you classify up to $25,000 of rental losses as nonpassive. This means you can deduct up $25,000 of rental losses from your nonpassive income, such as wages, salary, dividends, interest and income from a nonpassive business that you own.
There are two kinds of passive activities. Trade or business activities in which you dont materially participate during the year. Rental activities, even if you do materially participate in them, unless youre a real estate professional.
Under the passive activity rules you can deduct up to $25,000 in passive losses against your ordinary income (W-2 wages) if your modified adjusted gross income (MAGI) is $100,000 or less.

form 8582 2023