I have an ordinary loss reported to me on a k-1. I do not materially participate in this partnership and TurboTax thinks my losses are therefore passive. However, per the footnotes and instructions in the k-1, the partnership considers itself a trader for federal income tax purposes. The k-1 says that NONE of the distributive share items reported on schedule k-1 are considered as derived from a passive activity. Therefore, I am able to record a loss from this partnership on schedule E. However, since I indicate in TurboTax that I do not materially participate, TurboTax thinks this income is passive and will not put the loss on Schedule E. How do I get TurboTax to put the ordinary loss on Schedule E, Part II, Column (i)?
