IRS Form 8825 Rental Real Estate Income & Deduction — Complete 2025 Guide
Learn how to complete IRS Form 8825 for reporting rental real estate income, expenses, and net income or loss for partnerships and S corporations. This guide covers Form 8825 instructions, 2025 updates, line-by-line explanations, and filing requirements to help you accurately report rental real estate activities.
Table of Contents
What's New in Form 8825 (2025)
For tax years beginning in 2025, use the December 2025 revision of Form 8825.
Updated Form Version
- Use the December 2025 revision for tax years beginning in 2025.
- Earlier revisions apply to prior tax years.
New Other Information Codes
- New codes are added to Line 1, Column (c) to report information related to property acquisitions, dispositions, and other transactions.
- These codes apply to partnerships and S corporations required to file Schedule M-3.
Separate Reporting of Rental Income
Rental real estate income must now be reported separately:
- Line 2a: Gross rents
- Line 2b: Other rental real estate income
New Schedule A (Form 8825)
Partnerships and S corporations required to file Schedule M-3 must complete Schedule A (Form 8825) to report other rental real estate deductions. The total from Schedule A is reported on Form 8825, Line
What is IRS Form 8825?
IRS Form 8825, Rental Real Estate Income and Expenses of a Partnership or an S Corporation, is used by partnerships filing Form 1065 and S corporations filing Form 1120-S to report income, expenses, and net income or loss from rental real estate activities.
Form 8825 provides details of:
- Rental real estate income: Gross rents and other income related to rental real estate activities.
- Rental expenses: Allowable expenses such as interest, insurance, taxes, repairs, utilities, advertising, and other rental costs.
- Depreciation: Depreciation deductions for eligible rental property (with Form 4562 required in certain situations).
- Net rental real estate income or loss: The final amount after subtracting rental expenses from rental income, which flows through to partners or shareholders.
The reported rental real estate income or loss is passed through to partners or shareholders through Schedule K-1 (Form 1065 or Form 1120-S) .
Purpose of Form 8825
Form 8825 serves two main purposes:
- Tax Transparency
It discloses detailed rental income and expenses for each property owned by the entity. This ensures the IRS can verify that reported deductions match actual expenses. - IRS Oversight
By reporting rental activities in detail, Form 8825 enables the IRS to monitor: - Accuracy of income reporting
- Deductibility of expenses
- Compliance with passive activity rules under IRC Section 469
This helps prevent abuse, such as inflating expenses or misclassifying personal costs as business deductions.
Who Must File Form 8825?
Form 8825 is required for entities that report rental real estate income and expenses:
- Corporations and Partnerships Required to File
- S Corporations reporting rental real estate on Form 1120-S
- Partnerships reporting rental real estate on Form 1065
- Entities Not Required to File
- C corporations (they report rental income differently on Form 1120)
- Sole proprietorships (report rental income/expenses on Schedule E)
- Entities with no rental real estate activity
Filing Deadlines for Form 8825
Form 8825 must be filed with your main tax return:
| Entity Type | Main Return | Due Date |
|---|---|---|
| S Corporations | Form 1120-S | March 16, 2026 |
| Partnership | Form 1065 | March 16, 2026 |
Sections of IRS Form 4562 Explained
Form 4562 contains six parts. Each section deals with a specific type of deduction or property.
| Part | Section Title | Purpose |
|---|---|---|
| Part I | Election to Expense Certain Property (Section 179) | Deduct full cost of qualifying property |
| Part II | Special Depreciation Allowance | Claim bonus depreciation for eligible assets |
| Part III | MACRS Depreciation | Calculate annual depreciation using IRS methods |
| Part IV | Summary | Combine total deductions from all sections |
| Part V | Listed Property | Report assets like vehicles or equipment used for business and personal purposes |
| Part VI | Amortization | Record deductions for intangible assets |
Detailed Line-by-Line Instructions for Form 8825
Basic Information
Name
Enter the legal name of the partnership or S corporation as shown on your Tax Return
Employer Identification Number (EIN)
Enter the EIN of the partnership or S corporation filing Form 8825. Ensure it matches the EIN on the tax return.
Rental Real Estate Income and Expenses
Line 1: Rental Real Estate Property Information
Reports details of each rental real estate property owned by the partnership or S corporation.
Complete a separate column for each rental property.
Column (a): Physical Address of Property
Enter:
- Street address
- City
- State
- ZIP code
For foreign properties, include:
- Postal code
- Country
Column (b): Type of Property Code
Enter the applicable property type code:
| Code | Property Type |
|---|---|
| 1 | Single-family residence |
| 2 | Multi-family residence |
| 3 | Vacation or short-term rental |
| 4 | Commercial |
| 5 | Land |
| 6 | Royalties |
| 7 | Self-rental |
| 8 | Other property |
If you select Code 8 (Other), include a brief description on Form 8825 or attach a separate statement.
Column (c): Other Information Code
Only partnerships and S corporations required to file Schedule M-3 must complete this column. Enter the applicable other information code (A–I)
| Code | Description |
|---|---|
| A | Nontaxable contribution |
| B | Other exchange |
| C | Taxable acquisition |
| D | New construction, renovation, or basis adjustment |
| E | Reserved for future use |
| F | Nontaxable distribution |
| G | Taxable disposition |
| H | Abandonment |
| I | Other supplement |
Include additional details when required.
Column (d): Fair Rental Days
Enter the total number of days the property was rented at fair rental value during the tax year.
Column (e): Personal-Use Days
Enter the number of days the property was used personally. Follow the IRS personal-use rules under Section 280A when determining these days.
Rental Real Estate Income
Line 2a: Gross Rents
Enter the total gross rental income received from each rental real estate property during the tax year. Report the Total amount before deducting any rental expenses.
Line 2b: Other Income Related to Rental Real Estate Activity
Enter any other income related to the rental real estate activity that isn't included on Line 2a. This may include rental-related fees or other taxable income generated by the property.
Line 2c: Total Rental Real Estate Income
Add Line 2a (Gross Rents) and Line 2b (Other Income) for each property. Enter the total rental real estate income before subtracting any expenses.
Rental Real Estate Expenses
Line 3: Advertising
Enter the advertising expenses paid to promote the rental real estate property and attract tenants.
Line 4: Auto and Travel
Enter the allowable auto and travel expenses incurred for managing or maintaining rental real estate activities.
Line 5: Cleaning and Maintenance
Enter expenses paid for cleaning and routine maintenance of rental real estate properties.
Line 6: Commissions
Enter commissions paid for rental real estate activities.
Line 7: Insurance
Enter insurance expenses related to rental property, including:
- Property insurance
- Liability insurance
Line 8: Interest
Enter deductible interest expenses related to rental real estate activities.
Line 9: Legal and Other Professional Fees
Enter professional fees related to rental property activities, including:
- Legal services
- Accounting fees
- Tax preparation fees
Line 10: Real Estate Taxes
Enter the real estate taxes paid or accrued for rental real estate properties.
Line 11: Repairs
Enter expenses paid for repairs that keep the rental property in normal operating condition.
Line 12: Utilities
Enter utility expenses paid for rental real estate properties.
Line 13: Wages and Salaries
Enter wages and salaries paid to employees for services related to rental real estate activities.
Line 14: Depreciation
Enter the depreciation deduction allowed for rental real estate property.
Line 15: Reserved for Future Use
No entry is required. This line is reserved for future IRS use.
Line 16: Reserved for Future Use
No entry is required. This line is reserved for future IRS use.
Line 17: Other Deductions
Enter other deductible rental real estate expenses that are not reported on Lines 3 through 16.
Line 18: Total Rental Real Estate Expenses
Add Lines 3 through 17 to calculate the total rental real estate expenses for each property.
Line 19: Income or (Loss) From Each Rental Real Estate Property
Subtract Line 18 (Total Expenses) from Line 2c (Total Rental Real Estate Income) to determine the net income or loss for each rental property.
Calculation:
Line 2c − Line 18 = Line 19
Final Summary Lines
Line 20a: Total Rental Real Estate Income
Add the total rental real estate income from Line 2c for all rental properties reported on Form 8825, including any attached page 2.
Line 20b: Total Rental Real Estate Expenses
Add the total rental real estate expenses from Line 18 for all rental properties, including any attached page 2.
Line 21: Net Gain (Loss) From Form 4797
Enter the net gain or loss from the disposition of rental real estate property reported on Form 4797, Part II, Line 17.
Line 22a: Net Income (Loss) From Partnerships, Estates, and Trusts
Enter your share of net rental real estate income or lossreceived from partnerships, estates, or trusts as reported on Schedule K-1.
Line 22b: Identify Related Entities
Enter the name and Employer Identification Number (EIN) of each partnership, estate, or trust reported on Line 22a. Attach additional statements if needed.
Line 23: Net Rental Real Estate Income (Loss)
Combine the amounts from Lines 20a through 22a to calculate the net rental real estate income or loss. Enter the result on Schedule K, Line 2 of Form 1065 or Form 1120-S
Why Is Page 2 Included in Form 8825?
- Page 2 is used to report additional rental real estate properties when you have more than four properties.
- Complete Lines 1 through 19 for each additional property, then combine the totals and report Lines 20a through 23 only once on Page 1.
Special Reporting Considerations for Personal Use
If any rental property has personal use days, allocate expenses between rental and personal use in accordance with IRS rules (IRC Section 280A). Only expenses attributable to rental use are deductible on Form 8825.
Example of Rental Real Estate Reporting
ABC Partnership owns two rental properties in 2025:
| Property | Gross Rent | Expenses | Depreciation | Net Income |
|---|---|---|---|---|
| 123 Main St | $60,000 | $25,000 | $10,000 | $25,000 |
| 456 Oak Ave | $40,000 | $20,000 | $5,000 | $15,000 |
The net rental income of $40,000 is reported on Form 8825 and carried over to Form 1065, Schedule K
Deductible vs Non-Deductible Rental Expenses
- Deductible Expenses: Mortgage interest, real estate taxes, insurance premiums, repairs and maintenance, utilities, property management fees, depreciation (Form 4562).
- Non-Deductible Expenses: Personal expenses unrelated to rental, capital improvements (must be depreciated), owner draws or withdrawals.
Passive Activity Loss Limitation Reminder
Rental real estate income or loss reported on Form 8825 may be subject to passive activity loss rules under IRC Section 469. Losses are deductible only to the extent allowed by these rules unless the taxpayer qualifies as a real estate professional.
Common Errors and Penalties
Frequent Mistakes:
- Not filing Form 8825 when rental activity exists
- Misreporting rental income or expenses
- Failing to report depreciation properly
- Mismatch between Form 8825 and Form 1065/1120-S totals
Consequences:
- Disallowed deductions
- Additional taxes, penalties, or interest charges
Key Compliance Tips
- Maintain detailed property records, receipts, and invoices
- Attach supporting schedules for multiple properties
- Ensure totals match your main return
- File Form 7004 for extensions if needed
- Review IRS instructions each year before filing
Frequently Asked Questions (FAQs)
1. Do all partnerships and S corporations file Form 8825?
Only those with rental real estate activities are required to file.
2. Can Form 8825 be e-filed separately?
No. It must be filed with Form 1120-S or 1065. TaxZerone includes it automatically if required.
3. How should multiple properties be reported?
Attach separate schedules for each property listing income and expenses individually.
4. Are rental losses deductible?
Yes, but only within limits of passive activity loss rules under IRC Section 469.
5. Is depreciation required?
Yes. Depreciation must be calculated and reported using Form 4562.
6. Does personal use affect reporting?
Yes. Expenses must be allocated between rental and personal use; only rental expenses are deductible.
