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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 (see the instructions for line 7, later) is $100,000 or less ($50,000 or less if married filing separately), 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 $100,000 ($50,000 if married filing separately) but less than $150,000 ($75,000 if married filing separately), your special allowance is limited to 50% of the difference between $150,000 ($75,000 if married filing separately) and your modified adjusted gross income.

Generally, if your modified adjusted gross income is $150,000 or more ($75,000 or more if married filing separately), there is no special allowance.

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. Double click the form to view a copy of the form
  5. Click the printer icon to print a copy of the form

To view or print the form in the Online program:

  1. From within your TaxAct Online return, click Print Center in the left column.
  2. Click Custom 
  3. Click the checkbox(es) to the left of what you wish to print (the top section contains individual forms or schedules and the bottom section contains documents or worksheets). You may need to scroll down in the section to locate the item.
  4. Click Print and then click the PDF link. Click the printer icon or the save icon (available when you hover your mouse over the bottom of the PDF form) to print or save the PDF copy.

Note. If you see a message indicating you have not paid your return fees, click the View/Pay link, which will direct you through the Paper Filing steps. Continue through the screens until you have processed the payment for your product fees and then repeat the steps to print. 


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