How to I report K-1 income on a 1065 return that a partnership earned by having ownership in another partnership?

[Rick19744]

Just enter it into the software based on the K-1.  This way it retains the same character.

By way of example, if you had ordinary income - then enter it into your misc sales (or whatever other income account works).  If it is interest income - show it as interest income, etc.

You should hopefully have an investment account set up on your balance sheet and this account would be your offset.

By way of example, ordinary income - Dr. Investment Account in XYZ , CR. Income account, etc.

The key is that the character of any item does not change.