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If you actively participated in a passive rental real estate activity, you may be able to deduct up to $25,000 of loss from the activity from your nonpassive income. This special allowance is an exception to the general rule disallowing losses in excess of income from passive activities.

The maximum special allowance is:
  • $25,000 for single individuals and married individuals filing a joint return for the tax year.
  • $12,500 for married individuals who file separate returns for the tax year and lived apart from their spouses at all times during the tax year.
  • $25,000 for a qualifying estate reduced by the special allowance for which the surviving spouse qualified.
Modified adjusted gross income limitation. If your modified adjusted gross income (MAGI) is $100,0001 or less, your loss is deductible up to the amount of the maximum special allowance referred to in the preceding paragraph. 

If your modified adjusted gross income is more than $100,0001 but less than $150,0002, your special allowance is limited to 50% of the difference between $150,0002, and your modified adjusted gross income.

Generally, if your modified adjusted gross income is $150,0002 or more, there is no special allowance.

1 $50,000 if married filing separately
2 $75,000 if married filing separately

See the IRS Instructions for Form 8582 for more information

The passive activity loss should import in if you imported from your prior year TaxAct® return and can be found on Form 8582, Part 1, line 1c.

To view or print the form in the Desktop program:

  1. From within your TaxAct return (Online or Desktop), click Tools on the right side of the screen to expand the category and then click Forms Assistant
  2. Expand the Federal Forms folder and then expand the Forms and Schedules folder
  3. Scroll down to Form 8582 - Passive Activity Loss Limitations
  4. Click Print to view a copy of the form

NOTE: If, after you click Print in Step 4 above, you are directed to the Payment Option screen, you will need to process the product fees prior to printing. 

To view or print the form in the Online program:

  1. Sign in to your TaxAct Online return
  2. Click My Return on the right side of the screen
  3. Click Print Center, then click the Custom tab
  4. Click on the checkbox(es) to the left of the item(s) (the top section lists individual forms and schedules)  or  (the bottom section lists documents received or worksheets) which you wish to view or print (you may need to scroll down in the section to locate the item(s))
  5. Click the Print button and then click the PDF link. The item will appear in a PDF read-only format. At that time you can click the printer icon on the screen to actually print, or close the window without printing.
NOTE: If, after you click Print in Step 4 above, you are directed to the Payment Option screen, you will need to process the product fees prior to printing. 

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