Updated October 18, 2026. Quick answer: Parts IV and V of Form 8582 list your passive activities one at a time, with net income, net loss and prior-year unallowed losses in columns (a) to (c). Part IV is for rental real estate with active participation and Part V is for the rest. The column totals go to Part I, which is why you complete these parts first.
Related reading on this site: IRS Publication 925.
Which part gets which activity
The form captions the parts as “Complete This Part Before Part I, Lines 1a, 1b, and 1c.” for Part IV and “Complete This Part Before Part I, Lines 2a, 2b, and 2c.” for Part V.
For Part IV, the instructions say “Individuals and qualifying estates who actively participated in rental real estate activities must include the income or loss from those activities in Part IV to figure the amounts to enter on Part I, lines 1a through 1c, of Form 8582.”
One filing status is directed away: “Married individuals who file separate returns and lived with their spouses at any time during the tax year don’t qualify under the active participation rule and must use Part V instead of Part IV.”
Part V takes the rest. The instructions start “Use Part V to figure the amounts to enter on Part I, lines 2a through 2c, for:” and list “Passive trade or business activities,” “Passive rental real estate activities that don’t qualify for the special allowance, and” “Rental activities other than rental real estate activities.”
Where the number comes from, column by column
Column (a). “Enter the current year net income from each activity.” “Enter the total of column (a) on Part I, line 1a, of Form 8582.” The IRS example includes a Form 4797 gain: “A Schedule E rental activity has current year profit of $5,000 and a Form 4797 gain of $2,000. You enter $7,000 in column (a).” The Form 4797 page covers that form.
Column (b). “Enter the current year net loss for each activity.” “Don’t enter any prior-year unallowed losses in this column.” When an activity has both, “If an activity has net income on one form or schedule and a net loss on another form or schedule, report the net amounts separately in columns (a) and (b) of Part IV.” Their example: “A Schedule E rental activity has current year income of $1,000 on line 21 of Schedule E and a current year Form 4797 loss of $4,500. You enter $1,000 in column (a) and $4,500 in column (b).”
Column (c). “Enter the prior-year unallowed losses for each activity.” “You find these amounts in Part VII, column (c), of your 2024 Form 8582.” “Enter the total of column (c) from your 2025 Part IV on Part I, line 1c, of Form 8582.” For Part V, the matching instruction is “Enter the total of column (c) from your 2025 Part V on Part I, line 2c, of Form 8582.”
Columns (d) and (e). “Combine income and losses in columns (a) through (c) for each activity, and either enter the overall gain for the activity in column (d) or enter the overall loss for the activity in column (e).”
Where it goes next
Do not carry columns (d) and (e) into Part I. The instructions say “Don’t enter amounts from columns (d) and (e) in Part I, II, or III of Form 8582.” They add “These amounts will be used when the rest of Form 8582 is completed to figure the loss allowed for the current year.”
The column (a), (b) and (c) totals feed Part I lines 1a to 2d. If an activity shows an overall loss, the instructions say “Parts IV and V, columns (d) and (e), show whether an activity had an overall gain or loss.” and the allowed loss is then spread over those activities in Parts VI to IX, as described on the lines 10 and 11 page.
If you run out of rows, the instructions say “If you need additional lines for any of the Parts IV through IX, you can either attach copies of the applicable pages of Form 8582, or your own schedule that’s in the same format as the applicable part(s).”
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. The whole form is walked through on the Form 8582 page.
Common mistakes
- Entering a prior-year loss in Part IV when you did not take part in both years. The instructions say “If you didn’t actively participate in both years, enter the prior-year unallowed loss in column (c) of Part V.”
- Putting prior-year losses in the current-year loss column. The instructions say “Don’t enter any prior-year unallowed losses in this column.”
- Copying columns (d) and (e) onto Part I. The instructions say “Don’t enter amounts from columns (d) and (e) in Part I, II, or III of Form 8582.”
Related: Schedule E, Form 4797, rental income in retirement, and heirs inheriting a rental.
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.