The Learn More Link explains the need to treat each activity of the K-1 separately.
To determine what type of activity your partnership/LLC was involved in, look at boxes 1 through 3 of your Schedule K-1. An amount on:
- Box 1 indicates business activity
- Box 2 indicates real estate rental activity
- Box 3 indicates other rental activity.
- Other indicates a single activity other than a rental or business activity. This might include something like an investment club.
If your K-1 does not have an amount on these boxes, select Other.
Note: If your K-1 shows more than one type of activity, treat each one separately. Enter all business items on one K-1, all real estate rental items on another K-1, and all other rental items on a third K-1.
If you have an amount in Box 20, it is assumed you have an addendum statement. Any entry in Box 20 (or Box 17 from an 1120-S K-1) will generate follow-up questions to report the additional reporting information from the statement. @TaxCrazy
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