Schedule K-1 income from my LLC

[Ash0101]

In previous years, I have gone to a CPA for my taxes for my LLC and personal tax, but he made so many mistakes that I had to catch and harangue him to fix that I am attempting to do them myself this year using TurboTax Business (for the LLC) and Premier (for personal). I am comparing the return generated by TurboTax to my previous years of returns to ensure completeness and (some degree of) accuracy.

I completed my 1065 for my LLC (landlord renting a few single-family homes out, generating rental income) and issued K-1s to the partners. When filling out my personal tax return, I entered my K-1 information manually (I couldn't figure out how to import the K-1s that I created into my personal tax). I am having issues with the schedule E - it is showing my income as passive, when previous years of tax returns show it as non-passive. TurboTax also generated a Form 8582 for Passive Activity Loss Limitations, which has never been included in my tax returns before. What can I do to make this income non-passive? Did I check an incorrect box, or is this yet another mistake my CPA has been making for years?

[AliciaP1]

Yes, you may have marked on your Schedule K-1 entry that you did not actively participate in the Partnership or that you are a Limited Partner.  You need to review your entries for your Schedule K-1 to ensure they are correct.

You can get to the section to enter a Partnership K-1 in TurboTax Online by following these steps:

1. Sign in to your TurboTax
2. Open or continue  your return
   • Choose a section from the TurboTax menu and select Pick up where you left off
3. Using the search bar, type K-1 and select the Jump to link from the search results
   • Note: If the Jump to link doesn’t work, select the Federal tab, then under S-corps, Partnerships, and Trusts, select Wages & Income
   • Select Revisit or Start next to Schedule K-1
4. Answer Yes to Do you want to review Schedules K-1 or Q? and follow the prompts
   • Note: You may be prompted to upgrade to Premier, if you're not already using it
5. This will take you to the Schedules K-1 or Q screen
6. We’ll ask some questions about your K-1, and then you’ll enter the data from the form

To enter in TurboTax CD/Download:

1. Sign in to your TurboTax
2. Open or continue  your return
3. Using the search bar, type K-1 and select the Jump to link in the search results
4. This will take you to the Schedule K-1 and Schedule Q screen
   • Note: If the Jump to link doesn’t work, select Personal, then Personal Income
5. Select I’ll choose what I work on and continue until you reach the screen, Your 2022 Income Summary
6. Select Start next to Schedule K-1 under Business Investment and Estate/Trust Income
7. Answer Yes and follow the prompts
8. We’ll ask some questions about your K-1, and then you’ll enter the data from the form

[AmeliesUncle]

Do you qualify as a Real Estate Professional, that "Materially Participated" in the rentals?

https://www.irs.gov/publications/p925#en_US_2022_publink1000104591

By default, rentals are Passive.  But there are some exceptions, such as being a Real Estate Professional.