The IRS Instructions for Schedule K-1 (Form 1041) Box 5 Other Portfolio and Nonbusiness income indicate this is income that isn't subject to the passive activity rules. It also includes income in respect of a decedent (IRD), which isn't included in box 1, 2a, 3, 4a, 6, 7, or 8. In other words, this is taxable income to the recipient.
As Hi Palms mentioned earlier, Box 14 Code H reports adjustments to Net Investment Income Tax, reported on Form 8960. This adjustment may or may not be used in calculating your taxable income. See this IRS link for more info: Find out if Net Investment Income Tax applies to you.
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
