K1 form rent income

[tommarchetti]

k1 form, program will not allow me to put income on box 2 for rental income. There is active participation.  There is also regular business income in box 1. The program says to remove this number. But it is income to the Sub S K1 company. If I remove it II understate my income.

[HelenaC · Accepted solution]

When one K-1 has two different sources of income, you have to create two K-1's. 

Add a K-1 with only the Box 1 income. 

• This income is probably interest income and needs to be reported as ordinary income.
• Enter Part I and Part II information.
• Do not check off any other boxes on the Check Boxes That Have an Amount. Leave these blank.

Add another K-1 with Box 2 income.

• This income reports your rental activity.
• Enter Part I and Part II information.
• Check off all the boxes that have amounts on your K-1 on the Check Boxes That Have an Amount.

Related Information:

• What's a K-1?
• Where do I enter a K-1 that I received?
• How do I issue a K-1?
• How do I delete a K-1?