I'm thinking the same as you. Don't know why TT does not enter the Depletion amount on Schedule E. Actually, on the background Form1065 K-1 that TT creates when you enter the K-1 data, it has a note in the Box 20 Code T area (where it puts the depletion data) that says not to enter the Depletion expenses for Oil & Gas Royalties "here" but to "enter directly on the Schedule E worksheet." So I also manually entered it in Sched E Line 18-b (Depletion), as you did. That gave the result I needed (reducing the Royalty income by the Depletion expense amount, but I was still left with negative Loss entries, as it ignored the Royalty Income from Line 7 of the K-1 and entered a $0 as Income where it calculated this "Loss." Thus you end up with a Form 8582 showing a Disallowed Loss. Also the Loss is shown on the TT created K-1 as a passive loss suspended for current year. All these entries about Losses don't seem valid, since the Depletion is simply an expense that decreases the Royalty income. No "Loss" occurs. I sent Intuit a letter about this.
