Updated October 18, 2026. Quick answer: Part IX replaces Part VIII for an activity whose losses are reported on two or more forms or schedules. It splits the unallowed loss among those forms by ratio. What is left in column (e) is the allowed loss to report on each form.
When to use Part IX
The instructions say “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.” The form titles it “Activities With Losses Reported on Two or More Forms or Schedules.” The ordinary one-form case is on the Part VIII page.
The instructions also say “Use a separate copy of Part IX for each activity”. The forms that matter are listed: “Schedules C, E, and F”, “Form 8949”, and “Forms 4684 (Section B), 4797 (Parts I and II), and 4835.”
Same form, separate identification
Part IX also applies inside a single form. The instructions give this case: “capital losses that are 28% rate losses and those that aren’t.” The Schedule D side of that is on the Schedule D page. The instructions note that “Only losses that would cause a difference in tax liability if they were reported on a different form or schedule” are kept separate. The instructions include a worked Form 8949 example; use it from the instructions directly.
Form references and lines 1a to 1c
“In Part IX, enter the form or schedule and line number on the dotted line above each line 1a”. The form’s lines read “Net loss plus prior year unallowed” loss from form or schedule for 1a, “Net income from form or schedule” for 1b, and “Subtract line 1b from line 1a. If zero or less, enter” zero for 1c.
- Line 1a: “Enter the net loss plus any prioryear unallowed loss from the activity”
- Line 1b: “Enter any net income from the activity”
- Column (b): “Subtract line 1b, column (a), from line 1a, column (a), and enter the result in column (b).”
Columns (c), (d) and (e)
- 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.”
- Column (e): “Subtract the amount in column (d) from the loss entered on line 1a, column (a).”
The form heads these “(c) Ratio”, “(d) Unallowed” loss and “(e) Allowed” loss. The Part VII figure is on the Part VII page.
A computed illustration, not an IRS example, of the ratio step: if column (b) shows 3 on one form and 1 on another, 3 / 4 = 0.75 and 1 / 4 = 0.25, which add to 1.00.
Where it goes next
Column (d) is carried forward: “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) goes to your forms: “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”. Those include Schedule E, Form 8949, Form 4797 and Form 4684.
Edition and line numbers
This page reads the 2025 Form 8582, Passive Activity Loss Limitations and its 2025 instructions, the current files irs.gov served on 2026-10-18. They are the files for the tax year 2025 return, filed in 2026. The form’s own header says “Attach to Form 1040, 1040-SR, or 1041.” Check the tax year printed on the form you are filling in and use the line numbers on that year’s form, because a different year’s form can number or word its lines differently.
Common mistakes
- Using Part VIII for an activity with losses on two forms. The instructions say “use Part IX instead of Part VIII for that activity.”
- Sharing one Part IX across activities. The instructions say “Use a separate copy of Part IX for each activity”
- Forgetting to keep the carryover. The instructions say “Keep a record of Part IX so you can use the losses to figure your PAL next year.”
Related: Form 8582, Schedule E, Schedule D, Form 8949, and Part VIII.
Sources
- Instructions for Form 8582, Passive Activity Loss Limitations (2025): https://www.irs.gov/pub/irs-pdf/i8582.pdf
- Form 8582, Passive Activity Loss Limitations (2025): https://www.irs.gov/pub/irs-pdf/f8582.pdf
Read from the IRS documents linked above on October 18, 2026. General information, not tax advice. Your own facts decide the outcome, and a preparer, the account provider or the IRS is the right place to confirm anything consequential.