When you are entering this K-1 information into TurboTax, you will need to answer the question "Did you participant?" with "Yes"
Also under the screen titled "Describe this partnership", select the box for "All my investment in this activity is at risk"
This should allow the losses to be considered non-passive and be available to offset ordinary income.
To enter your K-1 in TurboTax Online or Desktop, please follow these steps:
- Once you are in your tax return, click on the “Federal Taxes” tab ("Personal" tab in TurboTax Home & Business)
- Next click on “Wages and Income” ("Personal Income" in TurboTax Home & Business)
- Next click on "jump to full list" or “I’ll choose what I work on”
- Scroll down the screen until to come to the section “Business Investments and Estate/Trust Income ”
- Choose "show more", then Schedule K-1 and follow the onscreen instructions
