ok seek pro help before the end of this year. because there are multiple owners of multiple properties with a least on actively if not materially participating I think there is still the need for a 1065 and since of your unusual situation this is not a do-it-yourself project. my opinion would be that the special allocation to the partner managing the property would be a guaranteed payment (they are performing services) so the net other income is split based on your ownership %'s. that guaranteed payment for managing the properties would be subject to self-employment tax.
the pro can evaluate the situation better because they can talk to you and ask whatever questions they want. they could even disagree on the need for a partnership return. It's their professional advice that you will be paying for.
if the IRS were to determine that you fail to file a partnership return the penalty is currently, based on the number of owners about $10,000 per year for each year. there could be other penalties for willful failure to comply with the tax laws.
