I'm part of a LLC (P) that owned two multifamily properties for a couple of years. There were the typical passive losses and this was reported through K-1's. One of the properties was sold in 2022 resulting in a 1231 gain of $57,845 and 1250 recapture of $4,175, as well as rental income of $8,000. When I enter this information, the $57,845 is somehow showing a negative amount for other income, and reducing my capital losses for the year (stock losses).
I've went through the questions multiple times and I'm just not seeing how this is possible. On the actual tax reform, it's showing under schedule 1 no gains under line 4 (referencing form 4797), but a loss of $57,845 on line 5. Under Schedule E, it's letting me take all of the passive losses I've accumulated over the years to offset current income and the sale. Any ideas?
