K-1 1065 Partnership loss

[lpatterson1]

I have an FLP where we have land with advertising signs on it. This year the property tax on the land was more than the sign rental income. Why am I being taxed when there is a loss? 

[PatriciaV]

Please clarify if the Schedule K-1 you received from the partnership reported a loss in Box 1 ordinary income. Did you enter all information from the K-1 into TurboTax?

[lpatterson1]

It's a 1065, and it's a family LLLP. We just own land and the rental signs on the land. I've put in everything from the K-1. I don't have any income in Box 1. Box 3 has $2571 (rental sign income), but Box 13 has a ZZ deduction (property tax) of $2959. The deduction is not showing up in the Deductions portion of TurboTax like it did last year. 

[PatriciaV]

You may wish to review your entries for this rental real estate activity. The property tax should be entered under Federal Taxes >> Rental Real Estate >> RRE Expense >> Taxes Paid >> Property Taxes.

Note the rental activity must first be added under Business Info >> About Your Business, and the type of business must include "Rental Real Estate."

This entry path will report the expense on Form 8825 Line 11 and will be included in the Net Income (Loss) on Line 17. This total is allocated to Schedule K-1 Line 2 Net rental real estate income (loss) based on the partners' ownership percentages.

If you would rather report this as "Other Rental Income" on Line 3, go to Forms Mode (F6) and open Form 1065 p5-6. 

1. Enter the rental income on line 3a(1). 
2. Then enter the property taxes on Line 3b as a positive number. 
3. If you use this method, you will need to check the box beside the amount then add an explanation on each Schedule K-1 under Supplemental Information Smart Worksheet.

@lpatterson1 

[lpatterson1]

There is no 3b on the forms. The income comes from renting billboards on the investment property. The loss is the "Real Estate Tax on Investment Land." Last year the tax showed up as a deduction, but it is not there this year. 

[lpatterson1]

Also, I don't see "Rental Real Estate" on the Premier TT.

[PatriciaV]

The instructions I provided earlier were for the business Form 1065 return in TurboTax Business. If your Schedule K-1 is not consistently reporting the activity for the business, you will need to discuss this with the firm that prepared the business return.