IRS Form 8825 – IRS Forms, Instructions, Pubs 2026 – In the world of real estate investing, partnerships and S corporations often generate income from rental properties. Properly reporting this income and associated expenses is crucial for tax compliance. IRS Form 8825 serves as the key document for detailing rental real estate income and expenses, ensuring accurate flow-through to partners or shareholders. This comprehensive guide explores everything you need to know about Form 8825, including its purpose, filing requirements, and how to complete it for the 2025 tax year.
What Is IRS Form 8825?
IRS Form 8825, titled “Rental Real Estate Income and Expenses of a Partnership or an S Corporation,” is a tax form used by partnerships and S corporations to report income and deductible expenses from rental real estate activities. It also captures net income or loss from rental real estate that flows through from other partnerships, estates, or trusts. Unlike individual rental income reported on Schedule E (Form 1040), Form 8825 is specifically designed for pass-through entities.
The form helps calculate the net rental real estate income or loss, which is then reported on Schedule K of Form 1065 (for partnerships) or Form 1120-S (for S corporations). This ensures that the income passes through to the owners’ individual tax returns. For the 2025 tax year, use the December 2025 revision of the form, available for download as a PDF from the IRS website: https://www.irs.gov/pub/irs-pdf/f8825.pdf.
Who Must File Form 8825?
Form 8825 must be filed by:
- Partnerships (filing Form 1065) that engage in rental real estate activities.
- S corporations (filing Form 1120-S) involved in rental real estate.
If your entity receives rental income from properties it owns or through flow-through from other entities, this form is required. However, do not use Form 8825 for:
- Trade or business activities unrelated to rental real estate.
- Portfolio income or deductions.
- Section 179 expense deductions.
- Commercial revitalization deductions.
Entities with multiple rental properties must report each property separately, even if grouped as a single activity under passive activity rules. If you have more than eight properties, attach additional pages of Form 8825.
Key Components and Sections of Form 8825
Form 8825 is structured to itemize income and expenses for each rental property. Here’s a breakdown of the main sections:
| Line/Section | Description |
|---|---|
| Line 1 | Property details: Enter the address, type of property (e.g., single-family, multi-family, commercial using codes 1-8), fair rental days, and personal use days. For entities required to file Schedule M-3, include additional codes in column (c) for transactions like acquisitions or dispositions. |
| Lines 2a-2c | Income: Report gross rents (2a), other related income (2b), and total income (2c) for each property. New for 2025: Separate reporting of gross rents and other income. |
| Lines 3-17 | Expenses: Itemize deductions such as advertising (3), auto and travel (4), cleaning and maintenance (5), commissions (6), insurance (7), interest (8), legal fees (9), real estate taxes (10), repairs (11), utilities (12), wages (13), depreciation (14), and other deductions (17 – attach Schedule A if filing Schedule M-3). |
| Line 18 | Total expenses for each property (sum of lines 3-17). |
| Line 19 | Net income or loss per property (line 2c minus line 18). |
| Lines 20a-23 | Totals: Aggregate income (20a), expenses (20b), and net figures across all properties, including flow-through amounts. Enter net on Schedule K, line 2. |
For entities filing Schedule M-3, use the new Schedule A (Form 8825) to detail “other deductions” and total them on line 17.
Step-by-Step Guide to Completing Form 8825
- Gather Documentation: Collect records of rental income, expense receipts, depreciation schedules, and property details.
- List Properties: On line 1, detail each property’s address, type code, and usage days.
- Report Income: Enter gross rents and other income on lines 2a and 2b.
- Itemize Expenses: Fill lines 3-17 with allowable deductions. Be mindful of passive activity limitations – refer to Form 1065 or 1120-S instructions.
- Calculate Nets: Compute per-property and total nets.
- Attach if Needed: Include statements for multiple activities under passive rules or Schedule A for other deductions.
- File with Return: Attach to Form 1065 or 1120-S.
Common Deductible Expenses on Form 8825
Deductible expenses must be ordinary and necessary for the rental activity. Popular ones include:
- Depreciation: Based on the property’s basis and useful life.
- Repairs vs. Improvements: Repairs are deductible; capital improvements are depreciated.
- Interest and Taxes: Mortgage interest and property taxes.
- Professional Fees: Legal, accounting, and management fees.
Track expenses meticulously to avoid audits.
Filing Requirements and Deadlines for Form 8825
Form 8825 is attached to your entity’s tax return and filed by the due date of Form 1065 or 1120-S – typically March 15 for calendar-year entities (or September 15 with extension). Electronic filing is encouraged for accuracy. For prior years (before 2025), use the November 2018 revision or earlier versions as applicable.
Recent Updates for the 2025 Tax Year
- Form Revision: December 2025 version required for 2025 tax years.
- New Codes: Additional codes for line 1 column (c) related to gains/losses from transactions.
- Income Separation: Lines 2a and 2b now distinguish gross rents from other income.
- Schedule A Requirement: Mandatory for Schedule M-3 filers to report other deductions.
Check IRS.gov/Form8825 for any legislation impacting the form.
Navigating IRS Form 8825 can streamline tax reporting for your partnership or S corporation’s rental activities. Always consult a tax professional for personalized advice, as tax laws evolve. Download the latest Form 8825 PDF here: https://www.irs.gov/pub/irs-pdf/f8825.pdf.