May I weigh in for clarity? Yes, I fully agree with you. I was a sold commissionable product through a LLC (K1, Box 1 for Ordinary business income (e.g. self-employed)) and I own investment real estate via the same LLC (K1, Box 2 for Net rental real estate income (loss)).
Yes, TT and all other software companies, require the separation of Box 1 and Box 2 on separate K1s so the Taxpayer may correctly report all self-employed income (with associated deductions) on a first K1 and then split out all associated expenses for their rental real estate on a second K2.
The splitting out allows the Taxpayer to file a proper tax return with the associated deductions from the remaining K1’s boxes to be coded against self-employed earned income vs. passive rental real estate income.
