Schedule E Wks - Passive Status

2 replies
194 views

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

MarilynGAnswer

Alumni - Intuit

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

**Say "Thanks" by clicking the thumb icon in a post. **Mark the post that answers your question by clicking on "Mark as Best Answer"

MarilynGAnswer

Alumni - Intuit

Here's more detailed info on Form 8582.

@wanggc

**Say "Thanks" by clicking the thumb icon in a post. **Mark the post that answers your question by clicking on "Mark as Best Answer"

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.