Updated October 18, 2026. Quick answer: Part VI is used only when Part II, line 9 of Form 8582 shows an amount. It spreads that special allowance across your rental real estate activities by a ratio of each activity’s loss. The activity losses come from Part IV, and any leftover loss moves on to Part VII.
When to fill in Part VI
The form heads the Part with “Use This Part if an Amount Is Shown on Part II, Line 9.” The instructions put it the same way: “Complete Part VI only if you entered an amount (other than zero) on Part II, line 9, of Form 8582.” If line 9 is blank or zero, the instructions send you straight on: “Otherwise, skip Part VI and complete Part VII”. The line 9 amount itself is figured in Part II of Form 8582.
What Part VI is for
“Use Part VI to allocate the special allowance on Part II, line 9, of Form 8582 among your rental real estate activities.” The activity rows come from Part IV, which lists each activity’s loss. Part VII then picks up whatever Part VI leaves unallowed. The loss figures that feed the Parts are explained on the Schedule E rental pages and the Form 8582 hub.
Filling in the name and form columns
“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.” The form’s column caption reads “Form or schedule”.
The instructions give an example: “The losses from partnership P are reported on line 28A of Schedule E.” When a loss is reported in more than one place, “identify both locations in the second column”. For extra room, “show this information on an attached statement.”
Where the number comes from
Each column has its own rule in the instructions.
- 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)”, then “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”. The instructions add “The total of column (c) must be the same as Part II, line 9, of Form 8582.”
- Column (d): “Subtract column (c) from column (a) and enter the results in column (d).”
The form’s column heads read “(a) Loss” and “(b) Ratio”, followed by the special allowance and subtraction columns.
Prior-year amounts on line 9
If line 9 includes prior-year unallowed amounts, the instructions say “complete a separate Part VI to allocate that portion of the special allowance”. The instructions refer to a Worksheet in the instructions for line 9, which is a table, so use it from the form instructions directly rather than from this page.
Where it goes next
What happens depends on whether column (c) covers column (a). The instructions say “If the total losses in column (c) are the same as those in column (a), the losses in Part IV” are “allowed in full and aren’t carried over to Part VII.” Otherwise “If the total losses in column (c) are less than the total losses in column (a), complete column (d).” The instructions then say “Also enter the amounts from column (d) of Part VI in column (a) of Part VII.” That step is on the Part VII page.
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
- Filling in Part VI when line 9 is zero. The instructions say “Complete Part VI only if you entered an amount (other than zero) on Part II, line 9, of Form 8582.”
- Letting the ratios stop short of the whole. The instructions say “The total of all the ratios in column (b) must equal 1.00.”
- Leaving the allocated total out of line with line 9. The instructions say “The total of column (c) must be the same as Part II, line 9, of Form 8582.”
Related: Form 8582, Schedule E, rental income in retirement, an LLC for rental property, and Part VII.
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.