Who Must File
Form 8582 is filed by individuals who have passive activity deductions (including prior year unallowed losses). However, you don’t have to file Form 8582 if you meet the following exception.
Exception
You actively participated in rental real estate activities and you meet all of the following conditions:
• Rental real estate activities with active participation were your only passive activities.
• You have no prior year unallowed losses from these or any other passive activities (exception losses from publicly traded partnerships (PTP) are not reported on form 8582).
• Your total loss from the rental real estate activities wasn’t more than $25,000 ($12,500 if married filing
separately).
• If you’re married filing separately, you lived apart from your spouse all year.
• You have no current or prior year unallowed credits from a passive activity (except PTP's.
• Your modified adjusted gross income (see the instructions for line 7, later) was not more than $100,000 (not more than $50,000 if married filing separately).
• You don’t hold any interest in a rental real estate activity as a limited partner or as a beneficiary of an estate or a trust.
If all the above conditions are met, your rental real estate losses are not limited, and you don’t need to complete Form 8582
