I am a member of a 3 person LLC that owns a farm (for recreation/hunting). I pay a CPA to have the farm taxes completed and it shows a negative value on line 2 of my Schedule K-1 (From 1065). I transferred that loss to my schedule C line 1 and then I checked the box on line 32A. My tax summary at the end shows a high risk of audit with verbiage that doesn't sound like I did it right so I am thinking that is not the correct place for the negative value? I think that negative value on my LLC 1065 is Net Rental income so it makes sense that it is not strictly 'business loss'? Any advice?
