IRS Form 8582 (Passive Activity Loss) - How to Record Publicly Traded Partnership (PTP) Investments

IRS Form 8582 is completed by noncorporate taxpayers to report their passive activity income and losses. Passive activity losses can generally only be offset against other passive activity income.
Special rules apply to investments in publicly traded partnerships (PTP) where the taxpayer receives a Schedule K-1. Under IRC Section 469, the passive activity loss (PAL) rules apply separately to each PTP investment. The Form 8582 does NOT report activities from PTP investments. The PTP income & loss must be separately tracked on a proforma Form 8582 for each PTP investment.
In this example, we have a taxpayer with three Schedule K-1s from passive activities. Two are from PTP investments, and the third investment is in a non-PTP partnership where the taxpayer does not materially participate.
Sale of PTP Investment: • How to Record Sale of ...
Form 8995 for PTP Income: • IRS Form 8995 with Pub...
For a larger database of tutorials, please visit our website and search for your question:
knottlearning.com/
DISCLAIMER: The information provided in this video may contain information about tax, financial, and legal topics. Such materials are for informational purposes only and may not reflect the most current developments. These informational materials are not intended and should not be taken as tax, financial, or legal advice. You should contact an advisor to discuss your specific facts and circumstances. Self-help services may not be permitted in all states or jurisdictions. The use of these materials does not create an attorney-client or confidential relationship. This video does not include information about every topic or issue related to these informational materials.
#Form8582 #PassiveActivityLoss #PubliclyTradedPartnership

[@jamescoonce6234]

Thank you! I bought some MLPs last year. This really helps.

[@genggui]

very helpful in busy season!

[@Ladder8A]

Can the passive activity losses that can’t be deducted, and carry over from past years be used to reduce taxes owed when the property is sold?
Thanks, Ray