Schedule E Wks - Passive Status

Forum|Forum|2 months ago
April 9, 2026
1 reply
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I have passive income from a rental activity on Schedule E, but it is not being offset by passive rental losses from my K-1's. The Schedule E income does not flow to Form 8582. The Schedule E Activity Summary Smart Worksheet shows the activity's Passive status as "Nonpassive". But its should be passive because it is rental real estate. How can I get the Passive status to change to "Passive"? Then the net rental income should flow to Form 8582 and be offset by passive losses.

Thanks

Best answer by MarilynG

To ensure K-1 rental income (or loss) is treated as passive in TurboTax on Form 8582, you must indicate you did not materially participate during the K-1 interview. Don't check the box that you "materially participated" when asked.

Here's more detailed info on Form 8582.

@wanggc

MarilynGAnswer

Level 15

Here's more detailed info on Form 8582.

@wanggc

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wanggcAuthor

Level 2

Thanks Marilyn. I figured out why the Rental Activity was being labeled Nonpassive for Sch E. I marked the activity as Land instead of Commercial Rental Property. When I changed the activity coding, Turbotax made it passive and it flowed to the 8582 as passive income and offset passive losses against it, which is what I was expecting. I'm all set.