You are going to have to adjust your return manually, as TT will not be able to handle this automatically.
In general, Indiana follows federal; and passive activities is one of those areas.
Indiana does not generate its own passive activity loss schedules.
You don't mention what your 2020 Indiana return looked like; I assume you most likely didn't prepare one with the large passive loss?
For 2021, you are going to need to look at your federal 8582 to see what is happening with your K-1 activity related to this Indiana K-1 activity; you don't mention if you have other passive activities.
Then you will need to manually adjust for this on the IT-40PNR Schedule A.
When the activity begins to generate income, I assume that this will be netting to zero until all of the 2020 passive losses are utilized. Once this occurs, then you will begin to report the income.
In my mind I believe you should file the return with a schedule attached which starts with the 2020 passive loss, any 2021 passive income and the net amount; which as stated earlier most likely nets to zero in 2021.
While this most likely will preclude you from efiling the Indiana return, I believe including the documentation on how you arrive to the net amount is important.
If you are not comfortable with doing the above, you should consider utilizing a tax professional.
*A reminder that posts in a forum such as this do not constitute tax advice.
Also keep in mind the date of replies, as tax law changes.
