IRS Form 8825 (Rental Real Estate Income and Expenses of a Partnership or an S Corporation) is used in conjunction with Form 1065 (for partnerships) or Form 1120-S (for S corporations) to report income and expenses from rental real estate activities.
It provides a detailed breakdown of the rental income and related expenses, and the net income (loss) flows through to Schedule K for the partnership or S corporation.
For example, the net rental real estate income (loss) at the bottom of Form 8825 flows through to Line 2 of Schedule K (Partners’ Distributive Share Items) on Form 1065.
It is important to remember that most rental activities are NOT reported on Page 1 of Form 1065 or Form 1120-S because rental activities are treated differently from regular ordinary trade or business activities.
Key Points to Remember About Form 8825
Separation from Other Income: The use of Form 8825 helps to segregate rental real estate activities from other types of income or losses reported on Form 1065 or Form 1120-S.
Multiple Properties: If the partnership or S corporation owns and rents out multiple real estate properties, each property’s income and expenses should be reported in a separate column on Form 8825.
Passive Activity Rules: Rental real estate is generally considered a passive activity. Taxpayers should use the information on Form 8825 in conjunction with Form 8582 (Passive Activity Loss Limitations) to determine whether the losses are deductible.
Additional Information
Taxpayers can find the current version of the Form 8825 by visiting the IRS website here.