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Level 2
posted Mar 23, 2025 2:02:55 PM

Form 8582 - Need to File?

In 2024 my sibling and I purchased a rental property (Passive Activity).  There was no income and a $162 loss for each of us (Box 1, Part III on K-1).

 

Form K-1 has been filed.  

 

Is it correct that the loss isn't allowed on 1040 because there is no income?

 

Also, how is this reported on 1040?  If the loss isn't allowed, is there any forms that need submitted with 1040.

 

Confused on this.

 

Thank you.

0 1 1156
1 Replies
Employee Tax Expert
Mar 26, 2025 6:58:33 AM

Passive activity losses offset passive activity income from other investments. If you don't have other passive activity income, then these losses are suspended and carried forward to other income years.

The exception to this, is if you have a modified adjusted gross income of less than $100,000 (single and married filing joint). In this case, losses can offset ordinary income such as wages, up to $25,000. The exception phases out completely at modified adjusted gross incomes of $150,000.