> what does 2a of form 4797 say?
It says "From K-1".
> on what line on schedule E does the loss originate?
Lines 21 and 32.
> you could be subject to Passive loss limitation. see form 8582.
Yes on p1 of 8582 I have a PAL of $69,958 (Part I line 3). Allowed losses (Part III line 11) are $10,380.
> the 4797 gain should flow to schedule D line 11
Yes it did, and to Form 1040 line 7
