What Is Form 8825?

8825 form - how to fill

If you live in the United States, then you should be aware of the 8825 Form (More at https://form-8825.pdffiller.com/). This is in relation to tax filament and reporting done in the U.S and recorded through the Internal Revenue Service. It is also commonly referred to as a Rental Real Estate Income and Expenses of a Partnership of S Corporation. It is mainly reserved for S Corporations and partnerships involved in rental real estate practices throughout the tax financial year.

Who can fill this form?

Any given company may come up with a list of 8 varied assets of this particular form. In this case, the filer is required to list down the revenue realized from the assets and also the tax-deductible expenditure in relations to the rentals. The payable amount of taxes on the assets will be determined by the net revenue and losses. Thus, it is important to appropriately include all items. The filer may also be eligible for some tax breaks based on their financial records.

Main Purpose of the Form

The IRS Form 8825 is mainly used by S Corporations and partnerships for the purpose of filing revenue and deductible operating costs accruing from activities related to their real estate business. This includes loss (net income) from real estate-related activities flowing in from estates, partnerships or trusts. In this case, it is critically important to go through the following before completing your form 8825:

  1. Passive Activity Limitations found in Form 1120S or Form 1065 instructions so as to understand the actual meaning of the term “Rental Activity”.
  2. Extraterritorial Income Exclusion as stated in Form 1120S or 1065 guidelines.

Specific Form 8825 instructions

Only a maximum of 8 asset (property) spaces are offered. In case of additional properties, you will be required to add an extra form. There is no specific count of columns for entering income records and expenses. Thus, they vary based on the total count of real estate activities the S Corporation or partnership deals with for passive activity limitation reasons.

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