That happens when you got to the K-1 entry screen Did You Participate? Did you materially participate in this activity? you clicked the No button (there is a Learn More link there that explains about material participation). That makes the income passive and it then goes to Form 8582 and is handled there. If any of the passive loss cannot be used it is carried over to the subsequent year for you by TT.
If you did materially participate then just edit the K-1 again and change your answer to Yes.
