Form 8825: rental real estate for partnerships and S corporations
Form 8825 is the IRS form partnerships and S corporations use to report rental real estate income and expenses, one column per property. Line 23 carries the net result to Schedule K, line 2, of Form 1065 or 1120-S, and from there to box 2 of each owner's K-1.
“Partnerships and S corporations use Form 8825 to report income and deductible expenses from rental real estate activities, including net income (loss) from rental real estate activities that flow through from partnerships, estates, or trusts.” IRS, About Form 8825
Who files Form 8825?
Form 8825 is filed by a partnership or S corporation that has rental real estate activity, attached to Form 1065 or Form 1120-S. According to the Instructions for Form 8825 (Rev. December 2025), the form reports income and deductible expenses from rental real estate, including net rental real estate income (loss) that flows through from other partnerships, estates or trusts. The Instructions for Form 1065 and Form 1120-S keep this activity off page 1 of the entity return and send it to Form 8825, Schedule K, line 2, and box 2 of each K-1.
The instructions list items that stay off Form 8825:
- Income or deductions from a trade or business, or from rental activity other than rental real estate
- Portfolio income or deductions
- The section 179 expense deduction
- Other items that must be separately stated to partners or shareholders
- Commercial revitalization deductions
The December 2025 revision is the one to use for tax years beginning in 2025. It splits line 2 into gross rents (line 2a) and other rental real estate income (line 2b), adds column (c) codes for acquisitions and dispositions that only Schedule M-3 filers must complete, and requires Schedule A (Form 8825) for other deductions when the entity files Schedule M-3.
Where does each source document go on Form 8825?
Each document in a rental real estate file has a home on Form 8825, and line 23 then carries the net result to Schedule K, line 2, of Form 1065 or 1120-S. The map below follows the line captions on the December 2025 form and the Instructions for Form 1065 (2025) and Form 1120-S (2025).
| Source document | What to take from it | Form 8825 line | Where it ends up |
|---|---|---|---|
| Lease or rent roll | Gross rents for the year, by property | 2a | Schedule K, line 2 (through line 23) |
| Rent roll or ledger | Late fees and other income related to the rental activity | 2b | Schedule K, line 2 |
| Lease terms, booking calendar | Fair rental days and personal-use days | 1 columns (d) and (e) | Section 280A test |
| Form 1099-MISC received, box 1 | Rents a tenant reported paying the entity | 2a | Tie-out to the rent roll |
| Form 1098, box 1 | Mortgage interest on the property loan | 8 | Schedule K, line 2, after any Form 8990 limit |
| Property tax bill | Real estate taxes paid for the property | 10 | Schedule K, line 2 |
| Insurance declarations page | Premium for the property | 7 | Schedule K, line 2 |
| Property manager statement | Commissions, repairs, utilities, wages | 6, 11, 12, 13 | Schedule K, line 2 |
| Property manager statement | Management fees (no dedicated line) | 17 | Schedule A (Form 8825) if Schedule M-3 filer |
| Depreciation schedule, Form 4562 | Current-year depreciation, excluding land | 14 | Schedule K, line 2 |
| Form 4797, Part II, line 17 | Ordinary gain or loss on rental real estate assets | 21 | Schedule K, line 2 |
| K-1 from a lower-tier partnership, estate or trust | Net rental real estate income (loss) | 22a | Schedule K, line 2 |
| Fixed asset additions elected under section 179 | Section 179 expense | Not on Form 8825 | Schedule K, line 12 (1065) or line 11 (1120-S) |
| Form 4797, line 7 | Net section 1231 gain or loss | Not on Form 8825 | Schedule K, line 10 (1065) or line 9 (1120-S) |
Line 23 is the only Form 8825 amount that leaves the form. Each owner's share of it shows up in box 2 of Schedule K-1 (Form 1065) or Schedule K-1 (Form 1120-S). If the entity has more than one rental real estate activity for passive loss purposes, the Instructions for Form 8825 require a statement attached to Schedule K and to each K-1 showing net income (loss) by activity.
How is Form 8825 line 23 calculated?
Form 8825 line 23 is the sum of the property columns plus two entity-level items. Lines 2a and 2b add to line 2c for each property. Lines 3 through 17 add to line 18, and line 19 is line 2c minus line 18 for that property.
Line 20a totals line 2c and line 20b totals line 18 across every page, since lines 20a through 23 are completed once, on page 1. Line 21 adds the ordinary gain or loss from Form 4797, Part II, line 17, on rental real estate dispositions. Line 22a adds rental real estate income (loss) from K-1s the entity received. Line 23 combines lines 20a through 22a and goes to Schedule K, line 2.
Two lines point to other forms. Line 8 interest may be limited under section 163(j) on Form 8990, and line 14 needs Form 4562 when property was placed in service during the year or the entity claimed depreciation on listed property. Land is never depreciable on line 14.
What does a Form 8825 calculation look like?
For example, a calendar-year partnership with two equal partners owns two properties in 2025. Property A is a duplex with a rent roll showing $48,000 of rent and $1,200 of late fees. Property B is a commercial building leased for $96,000, with $5,760 of management fees on the property manager statement. Neither property was sold, and the partnership holds no interests in other partnerships. All amounts below come from the 2025 source documents named in each row.
| Step | Form 8825 line | Property A | Property B |
|---|---|---|---|
| Gross rents (rent roll, lease) | 2a | $48,000 | $96,000 |
| Late fees | 2b | $1,200 | $0 |
| Total rental real estate income | 2c | $49,200 | $96,000 |
| Insurance (declarations page) | 7 | $2,400 | $4,200 |
| Mortgage interest (Form 1098, box 1) | 8 | $14,600 | $22,000 |
| Real estate taxes (tax bill) | 10 | $6,300 | $11,500 |
| Repairs | 11 | $3,100 | $0 |
| Depreciation (depreciation schedule) | 14 | $9,800 | $21,500 |
| Management fees | 17 | $0 | $5,760 |
| Total expenses | 18 | $36,200 | $64,960 |
| Income (loss) by property | 19 | $13,000 | $31,040 |
| Step | Line | Amount |
|---|---|---|
| Total rental real estate income | Form 8825, 20a | $145,200 |
| Total rental real estate expenses | Form 8825, 20b | ($101,160) |
| Net rental real estate income | Form 8825, 23 | $44,040 |
| Schedule K, line 2 | Form 1065 | $44,040 |
| Each partner's K-1, box 2 (50%) | Schedule K-1 (Form 1065) | $22,020 |
Each partner reports $22,020 of rental real estate income on Schedule E, Part II. The $44,040 on Schedule K, line 2, must equal line 23 exactly, because nothing else feeds that line when the partnership has no other rental real estate. If either partner had a loss instead, their own basis, at-risk and passive tests would decide how much of it they deduct.
What do reviewers check on Form 8825?
A reviewer checking Form 8825 confirms six items against the source documents and the December 2025 instructions. The prior-year return and depreciation schedule come first, because carryover depreciation and property counts both tie back to them. Then pull the current-year leases or rent rolls, every Form 1098, the property tax bills and the fixed asset additions list, and compare each one to its line before looking at totals. A difference at the property level is easier to explain than one in line 23.
Rental real estate income in box 2 is usually passive to the owner, so the partner-level review moves to Form 8582 and, for losses, the at-risk test on Form 6198. The depreciation on line 14 comes from Form 4562.
Every line checked against the documents the client sent
Filed reads the leases, rent rolls, Forms 1098, property tax bills and depreciation schedules, then checks every line of Form 8825 against them. Anything that doesn't tie comes back as a review item with a citation to the source.
Book a demoLine 8 for Property A shows $16,200, but the 2025 Form 1098 for that loan shows $14,600 in box 1. Confirm whether the $1,600 difference is a second loan on the property or interest that belongs to another property.
Common questions
Does Form 8825 replace Schedule E for a partnership?
Form 8825 does the job at the entity level that Schedule E, Part I, does for an individual landlord. The partnership or S corporation reports each property on Form 8825, and each owner then reports their share of line 23, shown in K-1 box 2, on Schedule E, Part II.
Where does section 179 go on a rental real estate return?
Section 179 expense never goes on Form 8825, according to the Instructions for Form 8825. The partnership reports it on Schedule K, line 12, and the S corporation on Schedule K, line 11. Each owner then applies the dollar and business income limits on their own Form 4562.
Does each building need its own column on Form 8825?
Each rental real estate property needs its own column on Form 8825, even when the entity groups several buildings into one activity for passive loss purposes. The instructions give the example of two apartment buildings in different cities that form one activity but still take two columns.