@tseib
The key to determining if your farm qualifies for the Qualified Business Income Deduction (QBID) for SSTB is your farm being a "business". In other words, you farm to make a profit and not just as a hobby. If so, you may be entitled to the QBI deduction of up to 20 percent, subject to various limitations.
According to the IRS: "You are in the business of farming if you cultivate, operate, or manage a farm for profit, either as owner or tenant. A farm includes livestock, dairy, poultry, fish, fruit, and truck farms. It also includes plantations, ranches, ranges, and orchards and groves."
Onto the k-1 question. You are talking an immaterial value here and as your accountant did, he put it into 1 1065 therefore report it in 1 k-1 as other income. It is related to that business so I'm unsure why he claims otherwise.
You created a history of small passive loses which you could not use as they could only be used against passive income by doing this otherwise. You basically have a carryforward for any future passive income that you can use in perpetuity. Generally, you may deduct in full any previously disallowed passive activity loss in the year you dispose of your entire interest in the activity.
Passive just means you did not materially participate in the business.
Your last question, I'm a bit confused. What do you mean you are reporting it twice? It should be reported once during the k-1 interview.
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