Form 8582 K-1rental income and carry forward losses

On Form 8285, Part V, our current year K-1 rental income is not shown as Current year Net income. Instead, Current year Net income is shown as 0 and Current year Net loss is equal to Prior years Unallowed loss carried over minus our K-1 rental income. Is this how it should be shown? I don’t see this in any 8582 instructions.

Furthermore, the resulting Current year Net loss is added to Prior years Unallowed loss to calculate Overall loss, giving us a larger overall loss than we should have. Is this correct?

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