Something is not right with this. I did what was recommended and it shows as a non-passive loss, which gives me 100% of the depreciation, but the activity has a loss and as of now, I have not entered any other passive income - I should not get any of the loss.
I think the only way around this is to either 1) go ahead and deduct the depreciation from the amount reported as a loss from the partnership on line 2 of the K-1 and make a note of it if ever questioned about it or 2) create a 2nd K-1 entry just for the depreciation amount, which gives a better audit trail. I do not understand why this was changed.
