Why Form 8582 when there's no loss?

Forum|Forum|3 years ago
February 13, 2023
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I have a small percentage in a business and received a K1 from them. There was a small amount of income. When I added the K1 to my 1040, TT generated a form 8582 Passive Activity Loss Limitations for the amount of the income. I didn't have a loss. Why the 8582?

Best answer by Rick19744

The purpose of form 8582 is to collect ALL income and loss of passive activities to determine if there are any passive activity loss limitations.

Collecting only loss activities would not provide the necessary information to determine any limitation.

Form 8582 is not just for rental activities. It is for any trade or business activity in which the taxpayer is a passive investor.

DianeW777

It depends. It could be based on the various items that may show in your K1. If you have more than just income from rental real estate or other passive activity (based on ownership percentage) then Form 8582 may be a necessary part of your tax return.

Instructions Form 8582

Please update if you have more questions and include the specific K1, as well as any line number with an entry.

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Benny12Author

It's a 1065 K1. Box 1 is filled in with the income. Box 20 has code Z. There is a Statement A QBI Pass Through Entity Reporting showing the ordinary business income and UBIA of qualified property. This is not rental real estate. It's actually a construction company - I have 1% .