{"id":7485,"date":"2025-06-15T10:55:33","date_gmt":"2025-06-15T18:55:33","guid":{"rendered":"https:\/\/huddlestontaxcpas.com\/?p=7485"},"modified":"2025-06-19T11:12:58","modified_gmt":"2025-06-19T19:12:58","slug":"form-8825-for-partnerships-s-corps","status":"publish","type":"post","link":"https:\/\/huddlestontaxcpas.com\/blog\/form-8825-for-partnerships-s-corps\/","title":{"rendered":"Form 8825 for Partnerships &amp; S Corps"},"content":{"rendered":"\n<p>If you&#8217;re involved in <a href=\"https:\/\/huddlestontaxcpas.com\/cpa\/real-estate\/\">real estate<\/a> through a partnership or S corporation, IRS Form 8825 (<a href=\"https:\/\/www.irs.gov\/pub\/irs-pdf\/f8825.pdf\" target=\"_blank\" rel=\"noreferrer noopener\">available for download here<\/a>) is a key tax form you need to get familiar with. While it may not get as much attention as the 1040 or Schedule E, this form plays a major role in how your rental income is reported \u2014 and it can affect your bottom line.<\/p>\n\n\n\n<p>Here\u2019s a breakdown of what Form 8825 is, who needs to file it, and how to go about filling it out.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">What Is Form 8825?<\/h3>\n\n\n\n<p>IRS Form 8825 is titled \u201c<strong>Rental Real Estate Income and Expenses of a Partnership or an S Corporation<\/strong>\u201d &#8212; really rolls off the tongue. This form is used to report the income, deductions, and expenses from rental real estate activities carried out through a <strong>partnership<\/strong> or <strong><a href=\"https:\/\/huddlestontaxcpas.com\/self-employed\/s-corp-c-corp-llc\/\">S corporation<\/a><\/strong>.<\/p>\n\n\n\n<p>Rather than using Schedule E (which is used by individuals), business entities use Form 8825 to report these activities as part of their informational tax returns (<strong>Form 1065 for partnerships<\/strong> or <strong>Form 1120S for S corps<\/strong>).<\/p>\n\n\n\n<p>The goal? To determine the net gain or loss from rental property operations, which is then passed through to individual partners or shareholders to report on their personal tax returns.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Who Needs to File Form 8825?<\/h3>\n\n\n\n<p>You\u2019ll need to file Form 8825 if:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Your business is a <strong>partnership or an S corporation<\/strong>,<\/li>\n\n\n\n<li>You have <strong>ownership or participation in rental real estate<\/strong>, and<\/li>\n\n\n\n<li>That rental activity <strong>generates income or incurs expenses<\/strong> during the tax year.<\/li>\n<\/ul>\n\n\n\n<p>This applies to landlords who own residential rental properties through an LLC taxed as a partnership or S corp, as well as real estate investment groups operating under a partnership model.<\/p>\n\n\n\n<p>Most importantly, <strong>C corporations do not use Form 8825<\/strong>, nor do individual property owners (they typically use Schedule E).<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"788\" height=\"1024\" src=\"https:\/\/huddlestontaxcpas.com\/wp-content\/uploads\/2025\/06\/image-788x1024.png\" alt=\"\" class=\"wp-image-7486\" srcset=\"https:\/\/huddlestontaxcpas.com\/wp-content\/uploads\/2025\/06\/image-788x1024.png 788w, https:\/\/huddlestontaxcpas.com\/wp-content\/uploads\/2025\/06\/image-231x300.png 231w, https:\/\/huddlestontaxcpas.com\/wp-content\/uploads\/2025\/06\/image-768x999.png 768w, https:\/\/huddlestontaxcpas.com\/wp-content\/uploads\/2025\/06\/image.png 1046w\" sizes=\"auto, (max-width: 788px) 100vw, 788px\" \/><\/figure>\n\n\n\n<p><strong>Important Note:<\/strong> <strong>Do not use Form 8825 if you&#8217;re filing as a <a href=\"https:\/\/huddlestontaxcpas.com\/blog\/10-tax-tips-for-sole-proprietors\/\">sole proprietor<\/a><\/strong> \u2014 in that case, you\u2019d typically report rental income on <strong><a href=\"https:\/\/huddlestontaxcpas.com\/blog\/understanding-schedule-e-refinance-costs-what-you-need-to-know\/\">Schedule E<\/a><\/strong> of your Form 1040.<\/p>\n\n\n\n<p><strong>C corporations<\/strong> also do <strong>not<\/strong> use Form 8825. Rental income would be reported directly on Form 1120.<\/p>\n\n\n\n<p>If your entity owns <strong>multiple rental properties<\/strong>, each one should be listed separately on Form 8825.<\/p>\n\n\n\n<p>The income or loss calculated on Form 8825 carries over to the appropriate lines on the parent return (Form 1065 or 1120S), and eventually to owners&#8217; <strong>K-1s<\/strong>, where it may be subject to passive activity rules.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">How to Fill Out Form 8825<\/h3>\n\n\n\n<p>Filling out Form 8825 requires accurate records of your rental income and expenses. Here\u2019s a basic walkthrough of how to complete it:<\/p>\n\n\n\n<h4 class=\"wp-block-heading\">1. Property Information<\/h4>\n\n\n\n<p>Start by listing each rental property separately. For each one, you\u2019ll provide:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Property address or description,<\/li>\n\n\n\n<li>Type of property (e.g., residential, commercial),<\/li>\n\n\n\n<li>Number of days rented and personal use (if any).<\/li>\n<\/ul>\n\n\n\n<p>If you have <a href=\"https:\/\/huddlestontaxcpas.com\/blog\/income-property-investments-for-lihtc\/\">multiple properties<\/a>, the form has additional rows and allows attachments for more entries.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\">2. Rental Income<\/h4>\n\n\n\n<p>Report the <strong>gross rental income<\/strong> received from each property \u2014 this includes rent payments but not security deposits (unless retained due to lease breaches).<\/p>\n\n\n\n<h4 class=\"wp-block-heading\">3. Expenses<\/h4>\n\n\n\n<p>Next, enter all deductible expenses associated with each rental property, including:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Advertising<\/li>\n\n\n\n<li>Auto\/travel (related to property management)<\/li>\n\n\n\n<li>Cleaning and maintenance<\/li>\n\n\n\n<li>Commissions<\/li>\n\n\n\n<li>Insurance<\/li>\n\n\n\n<li>Legal and professional fees<\/li>\n\n\n\n<li>Management fees<\/li>\n\n\n\n<li>Mortgage interest<\/li>\n\n\n\n<li>Repairs<\/li>\n\n\n\n<li>Property taxes<\/li>\n\n\n\n<li>Utilities<\/li>\n\n\n\n<li>Depreciation or depletion<\/li>\n<\/ul>\n\n\n\n<p>These expenses should be directly tied to the rental activity, not personal use.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\">4. Totals and Net Income<\/h4>\n\n\n\n<p>At the bottom, you&#8217;ll calculate:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Total income,<\/li>\n\n\n\n<li>Total expenses,<\/li>\n\n\n\n<li>Net gain or loss for each property.<\/li>\n<\/ul>\n\n\n\n<p>This net number flows into the overall partnership or S corporation\u2019s return and then into each partner\u2019s\/shareholder\u2019s K-1, which they report on their personal taxes.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\">5. Passive Activity Rules<\/h4>\n\n\n\n<p>Keep in mind: most rental activities are considered <strong>passive<\/strong> unless you\u2019re a real estate professional. This matters because <strong>passive losses can\u2019t always be deducted against ordinary income<\/strong> \u2014 they may be limited or carried forward.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Pro Tips<\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Keep detailed records of all rental income and expenses throughout the year.<\/li>\n\n\n\n<li>Don\u2019t forget <strong>depreciation<\/strong> \u2014 it\u2019s one of the most valuable deductions and is often overlooked.<\/li>\n\n\n\n<li>If your entity owns multiple rental properties, ensure each one is separately reported \u2014 mixing property data can raise IRS red flags.<\/li>\n\n\n\n<li>Consult a tax professional if you\u2019re unsure whether your activity qualifies as passive or active, especially if you materially participate in property management.<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">Final Thoughts<\/h3>\n\n\n\n<p>Form 8825 might not be well known outside real estate circles, but for partnerships and S corps with rental activity, it\u2019s essential. Filing it properly ensures you stay compliant with IRS regulations and maximize your allowable deductions.<\/p>\n\n\n\n<p><em>Image generated by Sora<\/em>.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>If you&#8217;re involved in real estate through a partnership or S corporation, IRS Form 8825 (available for download here) is a key tax form you need to get familiar with. While it may not get as much attention as the 1040 or Schedule E, this form plays a major role in how your rental income [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":7487,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","footnotes":""},"categories":[23],"tags":[],"class_list":{"0":"post-7485","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-real-estate","8":"entry"},"_links":{"self":[{"href":"https:\/\/huddlestontaxcpas.com\/wp-json\/wp\/v2\/posts\/7485","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/huddlestontaxcpas.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/huddlestontaxcpas.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/huddlestontaxcpas.com\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/huddlestontaxcpas.com\/wp-json\/wp\/v2\/comments?post=7485"}],"version-history":[{"count":1,"href":"https:\/\/huddlestontaxcpas.com\/wp-json\/wp\/v2\/posts\/7485\/revisions"}],"predecessor-version":[{"id":7488,"href":"https:\/\/huddlestontaxcpas.com\/wp-json\/wp\/v2\/posts\/7485\/revisions\/7488"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/huddlestontaxcpas.com\/wp-json\/wp\/v2\/media\/7487"}],"wp:attachment":[{"href":"https:\/\/huddlestontaxcpas.com\/wp-json\/wp\/v2\/media?parent=7485"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/huddlestontaxcpas.com\/wp-json\/wp\/v2\/categories?post=7485"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/huddlestontaxcpas.com\/wp-json\/wp\/v2\/tags?post=7485"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}