You should not split any of the box amounts.
If both Box 1 and Box 2 are a loss you are going to have to report both 7203s. You will show the same beginning basis and contributions for both but report the box 1 loss amount on the K-1 with that loss and report the Box 2 loss amount on the K-1 reporting Box 2. If only one of the boxes has a loss and you have a distribution in box 16 code D, be sure to report the loss and box 16 on the same K-1. This will eliminate the need for 2 7203s.
Finally, based on your statement, your business generates the income itself, so you will answer no.
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