Form 8825 is the IRS form partnerships and S corporations use to report income and deductible expenses from rental real estate, property by property. It's attached to Form 1065 or Form 1120-S, and the net result flows through to the owners on Schedule K-1. Individuals with their own rentals use Schedule E instead.
If a business entity owns rental property, this is where the rents and costs go before anything reaches the partners or shareholders. For tax years beginning in 2025 the IRS issued a December 2025 revision of the form, with new codes, split rent lines and a new Schedule A for some filers. Everything here comes from the IRS Instructions for Form 8825 and Schedule A (12/2025) and the form itself.
Who files Form 8825
Partnerships and S corporations file it to report income and deductible expenses from rental real estate activities. That includes net income or loss from rental real estate that flows through to them from other partnerships, estates or trusts. A sole owner renting out a flat in their own name doesn't use it: that goes on Schedule E of their personal return.
Before filling it in, the IRS points you to the passive activity limitation rules in the Form 1065 or Form 1120-S instructions, especially the definition of a rental activity, because that decides what belongs here.
Which version to use
| Tax year | Revision of Form 8825 |
|---|---|
| Beginning in 2025 | December 2025 revision |
| Beginning 2018 to before 2025 | November 2018 revision |
| Earlier years | Prior revisions at IRS.gov/Form8825 |
One column per property, not per activity
This is the rule that trips people up. Each building gets its own column, even if you've grouped several buildings into one activity for the passive loss rules. The IRS example: a partnership owns two apartment buildings in different cities and treats them as a single activity. It still reports each building in a separate column.
If you have more than four properties, page 2 has been redesigned to take four more entries, and you attach as many extra pages as you need. Lines 1 through 19 are completed for each property; lines 20a through 23 only once, on page 1, with combined totals from every page. If the entity has more than one rental real estate activity for passive purposes, it also attaches a statement to Schedule K, and to each Schedule K-1, showing net income or loss by activity.
Line 1: the property type codes
For each property you enter the street address, city and ZIP code (postal code and country if it's outside the US), then a type code in column (b):
| Code | Type of property |
|---|---|
| 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 (with a description) |
Columns (d) and (e) take the number of days the property was rented at fair market value and the number of days of personal use, which feed the section 280A rules. Column (c) is new and only required if the entity files Schedule M-3: it uses letter codes A to I for events such as a section 1031 exchange (B), new construction or renovation (D) or a taxable disposition (G).
The income and expense lines
- Line 2: gross rents and other rental real estate income now go on separate lines, 2a and 2b.
- Lines 3 to 13: advertising, auto and travel, cleaning and maintenance, commissions, insurance, interest, legal and professional fees, real estate taxes, repairs, utilities, and wages and salaries.
- Line 14: depreciation. Land isn't depreciable. If property was placed in service this year, or you're claiming depreciation on a vehicle, attach Form 4562.
- Line 17: other deductions. Schedule M-3 filers must now itemise these on the new Schedule A (Form 8825) for each property; everyone else enters them directly.
- Lines 18 to 23: totals per property, then the combined net rental real estate income or loss, including any gain from Form 4797 and flow-through amounts from other entities.
Line 8 interest can be limited by the business interest expense rules; the IRS refers you to the Instructions for Form 8990 for that.
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What doesn't belong on Form 8825
- Income or deductions from a trade or business, or from a rental activity other than rental real estate.
- Portfolio income or deductions.
- The section 179 expense deduction.
- Commercial revitalization deductions.
- Any other item that has to be reported separately to the partners or shareholders.
Mistakes that cost owners later
Most problems with Form 8825 aren't about the arithmetic. They're about putting things in the wrong place, which then shows up on every owner's K-1. These are the ones the instructions warn against, directly or by implication:
- Using the 2018 revision for a 2025 tax year. The December 2025 form has new lines and codes, so the old one won't line up.
- Lumping buildings together because they're one passive activity. They're still separate columns.
- Claiming depreciation on land. Land isn't depreciable, so split the purchase price between land and building before line 14.
- Leaving the personal-use days blank. If an owner stayed in a holiday let, column (e) is what triggers the section 280A limits.
- Burying a section 179 deduction in line 17. It's reported separately to the owners, not on this form.
If you're the owner receiving the K-1 rather than the one preparing the return, the number you'll see is your share of line 23, the net rental real estate income or loss. Whether you can use a loss depends on your own passive activity position, which is why the entity also has to break income down by activity when it has more than one.
The verdict
If your partnership or S corporation owns property and collects rent, Form 8825 is non-negotiable, and for 2025 you need the December 2025 version. Give every building its own column, use the right type code, and check whether you're a Schedule M-3 filer, because that's what decides whether column (c) and the new Schedule A apply to you.
Frequently asked questions
Who has to file Form 8825?
Partnerships and S corporations with rental real estate income or expenses, including rental income that flows through from other partnerships, estates or trusts.
Is Form 8825 the same as Schedule E?
No. Form 8825 is for partnerships and S corporations; individuals report their own rental property on Schedule E.
What is Schedule A (Form 8825)?
A new schedule for partnerships and S corporations that must file Schedule M-3. It itemises other deductions for each property, with the total going on Form 8825, line 17.
Can I combine two buildings in one column?
No. Each property gets its own column, even if the buildings are grouped as one activity for the passive activity rules.
