Rental real estate activity.

Unless you are a qualifying real estate professional, a rental real estate activity is a passive activity even if you materially participated in the activity. If you have a loss, you may need to file Form 8582 to apply a limitation that may reduce your loss. See the Instructions for Form 8582.

Reporting your net profit or loss.

Once you have figured your net profit or loss, report it as follows.

If you enter a loss on line 31, you may have an excess business loss. Use Form 461 to figure your excess business loss.