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Without knowing more about the entries you have in those boxes it is difficult to say which entry they should go on. You need to look at each amount and determine if it belongs to the rental or business income entry, then put it on the K-1 entry depending on which income type is being entered.
It could make a difference where you put the entries, especially if you have losses, as the deductibility of losses for ordinary income and rental income can be different.
What to do for an partnership activity that is primarily real estate rental income that has a small amount of business income, i.e. Line 1 is tiny compared to Line 2. I would think you fill the first K-1 with Line 2 and all the other lines, but on the second K-1 only fill in Line 1.
Is this a correct approach?
The order in which the two K-1s are entered is of no concern. The key is that they both have to be posted. I do agree that unless you have other guidance from the preparer of the K-1, you should put the entire K-I posting under the Box 2 entry.
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