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Department of the Treasury
Internal Revenue Service
Instructions for Form
8582-CR
(Rev. December 2019)
Passive Activity Credit Limitations
Section references are to the Internal following credits from passive If you are married filing jointly, one
Revenue Code unless otherwise noted. activities. spouse must separately meet both 2a
• General business credits. and 2b without taking into account
General Instructions • Qualified plug-in electric and services performed by the other
electric vehicle credit. spouse.
Future Developments A real property trade or business is
For the latest developments related to Overview of Form any real property development,
Form 8582-CR and its instructions, The form contains six parts. The redevelopment, construction,
such as legislation enacted after they Specific Instructions include, at the reconstruction, acquisition,
were published, go to IRS.gov/ beginning of the instructions for each conversion, rental, operation,
Form8582CR. part, a brief explanation of the management, leasing, or brokerage
purpose or use of that part. These trade or business.
Purpose of Form explanations give a general overview Services you performed as an
Form 8582-CR is used by of how the form works. employee aren’t treated as performed
noncorporate taxpayers to figure the in a real property trade or business
Also, as you read the instructions
amount of any passive activity credit unless you owned more than 5% of
that follow, see Example of How To
(PAC) for the current tax year the stock (or more than 5% of the
Complete Form 8582-CR. The
(including any prior year unallowed capital or profits interest) in the
example goes through a six-step
credits) and the amount of credit employer.
analysis of how the form and
allowed for the current year. It is also
worksheets are completed for a
used to make the election to increase 3. A working interest in an oil or
partner in a limited partnership that
the basis of credit property when a gas well. Your working interest must
has a low-income housing credit.
taxpayer disposes of his or her be held directly or through an entity
interest in an activity. that doesn’t limit your liability (such as
Activities That Aren’t a general partner interest in a
PACs that aren’t allowed in the Passive Activities partnership). In this case, it doesn’t
current year are carried forward until The following aren’t passive activities. matter whether you materially
they are allowed against the tax on participated in the activity for the tax
either net passive income or the 1. Trade or business activities in
year.
special allowance, if applicable. which you materially participated for
the tax year. If, however, your liability was
limited for part of the year (for
Different rules apply to your 2. Any rental real estate activity in
example, you converted your general
activities and the related credit, which you materially participated if
partner interest to a limited partner
depending on the type of activity. you were a “real estate professional”
interest during the year), some of your
Generally, passive activities include: for the tax year. You were a real
income and losses from the working
• Trade or business activities in estate professional only if:
which you didn’t materially participate interest may be treated as passive
a. More than half of the personal
for the tax year. activity gross income and passive
services you performed in trades or
• Rental activities, regardless of your activity deductions. See Temporary
businesses during the tax year were
participation. Regulations section 1.469-1T(e)(4)(ii).
performed in real property trades or
4. The rental of a dwelling unit you
See Trade or Business Activities businesses in which you materially
used as a residence if section 280A(c)
and Rental Activities, later. participated, and
(5) applies. This section applies if you
For more information, see Pub. b. You performed more than 750 rented out a dwelling unit that you also
925, Passive Activity and At-Risk hours of services during the tax year used as a home during the year for a
Rules. in real property trades or businesses number of days that exceeds the
in which you materially participated. greater of 14 days or 10% of the
Note. Corporations subject to the For purposes of item 2, each number of days during the year that
passive activity rules must use Form interest in rental real estate is a the home was rented at a fair rental.
8810, Corporate Passive Activity Loss separate activity unless you elect to 5. An activity of trading personal
and Credit Limitations. treat all interests in rental real estate property for the account of owners of
as one activity. See Regulations interests in the activity. For purposes
Who Must File section 1.469–9(g)(3) for details. of this rule, personal property means
Form 8582-CR is filed by individuals, property that is actively traded, such
estates, and trusts with any of the
Jan 29, 2020 Cat. No. 64649B
