Is a loss on a K-1 (1065) on line 2 of Part III reportable? This is the first year of receiving a K-1 from an LLC (tax yr 2021). What if the K-1 shows a gain for 2022?

[jgibbs-nd-edu]

My spouse is a limited partner and a domestic partner.  She has not invested in the LLC.

[Mike9241]

a 2021 k-1 on a calendar year gets reported on your 2021 1040 return, not on the 2022 return.  How did she get a k-1 from the LLC if she is not an investor? (not possible she must be or have been a member to get it). as a limited partner (actually an LLC member) and the loss being from real estate, the passive activity loss rules come into play. a portion or all might be deductible in 2021. you do not have the option of using that portion in 2022, for the loss to be partially or fully deductible she must have tax basis and be at risk for the amount of the loss. 

if you have already filed 2021 and not reported the k-1 (again assuming it's on a calendar year) you need to amend it. if you haven't filed 2021 you need the desktop app and will have to mail in your return. e-filing and online prep for 2021 are permanently closed.

[jgibbs-nd-edu]

I believe I need to complete an 8582 for 2021.  Part I - Line 2a zero, L2b the amount of the loss, and Line 2c equal to zero since 2021 is the first year.  Part V - name of activity and enter the amount of the loss in the column (b) Net Loss (line 2b) and the amount of the loss in column (e). Part VII - name of activity, the amount of loss as a positive number in column (a) and in column (c).

[PatriciaV]

Please clarify which version and year of TurboTax you are using to report this Schedule K-1. Also, are you filing an original return or an amended return?

[jgibbs-nd-edu]

An amended return for 2021.

[AbrahamT]

The form 8582 would be used to calculate your passive activity loss limitation if you were filing your 1040 for the 1st time in 2021. Turbotax would have automatically calculated this form when you would enter the passive activity loss from your 1065

K-1. Passive activity losses are offset against passive gains( passive income from the 1065 etc )  with the remaining loss carried over to the following year. If your AGI is 100K or less, then you can deduct upto 25,000 of this loss against your orinary income( W2 wages), if you had any.

In your situation, however you will fill out a 1065X which is an amended return for an 1065LLC for 2021 . You will also need to file a 1040X  which is an amended return for 2021 for picking up the net loss on your personal tax return as well. Consequently, the state tax returns would have to be amended as well.