Purpose of Form:
Form 8582 is used by noncorporate taxpayers to figure the amount of any passive activity loss (PAL) for the current tax year and to report the application of prior year unallowed PALs.
A PAL occurs when total losses (including prior year unallowed losses) from all your passive activities exceed the total income from all your passive activities.
Generally, passive activities include:
Who Must File
Form 8582 is filed by individuals, estates, and trusts who have passive activity deductions (including prior year unallowed losses). However, you do not have to file Form 8582 if you meet the following exception.
Form 8582 Passive Activity Loss Limitation