To indicate active participation in an investment that sends you Schedule K-1, return to that area of TurboTax and review your entries.
The easiest way to find this section of TurboTax is to search on "schedule k-1" and click on "jump to schedule k-1" to go directly to the start of this section.
Click Edit/Update beside the type of K-1 you need to work on, then click Edit beside the company you wish to review.
Follow the prompts to the page "Did You Participate?" If you answer "yes" to Material Participation, the income from Schedule K-1 will be treated as non-passive income.
Income from Schedule E (rental real estate, royalties, partnerships, etc.) are reported on Form 1040 Line 17.
I have the same issue. I can't get it to ask me if I participated. So I did it in the form mode. Part III 1. Ordinary business income (loss) - Check if "materially" participated in the business activities. But after I checked it, my refund did not change. My Schedule K loss is mainly "zz - Other Income (loss)".
I found it might have considered my schedule k loss as non-passive loss without me check I materially participated. Do you know why? I did file the loss on form 4797 about the loss. Also I indicated the income/loss is QBI.
Thank you very much!