Thank you for the reply. This kind of makes sense to me except for the specific language in the k-1. It clearly states that "None of the distributive share items reported on schedule k-1 are considered as derived from a passive activity." It also says that the k-1 was prepared on the basis of a partner who does not materially participate. If this is the case, why does it say non of the items reported on the k-1 are considered derived from a passive activity?
