Investors & landlords

The form is basically used to calculate any passive activity loss (PAL) and also to report the use of a prior year suspended PALs. 

 

It might just be a spurious form in your return package, but it also could be the result of your freelance customer service business and whether the PAL limitation is applicable (it would only be applicable if you did not materially participate).

 

See https://www.irs.gov/instructions/i8582#en_US_2021_publink1000278154

 

 

 

 

Form 8582 is used by noncorporate taxpayers to figure the amount of any passive activity loss (PAL) for the current tax year and to report the application of prior year unallowed PALs.

 

A PAL occurs when total losses (including prior year unallowed losses) from all your passive activities exceed the total income from all your passive activities.

 

Generally, passive activities include the following.

  • Trade or business activities in which you did not materially participate for the tax year.

  • Rental activities, regardless of your participation.