HOW DO I ADJUST FORM 8960 MANUALLY

Forum|Forum|4 months ago
April 10, 2026
1 reply
57 views

I HAVE A 1231 GAIN ON A K-1 THAT I GOT FOR 2025. SINCE I WAS ACTIVELY INVOLVED IN THE BUSINESS THIS GAIN IS NOT SUBJECT TO THE NET INVESTMENT INCOME TAX..... WHERE DO I MAKE THIS ADJUSTMENT?

TurboTax Online

PatriciaV

Level 15

If you have indicated that you "Materially Participated" in the company that provided Schedule K-1, the income should be reported as nonpassive. However, if changing this answer doesn't resolve the issue, you have another option.

All income reported in Box 1 is nonpassive. Therefore, you can create another K-1 with the same information for Part 1. Then enter the Section 1231 gain in Box 1 on that Schedule K-1 only. This should add the gain to your nonpassive income.

Be sure to remove the 1231 gain from the original K-1 entry so you don't report the income twice.

**Say "Thanks" by clicking the thumb icon in a post. **Mark the post that answers your question by clicking on "Mark as Best Answer"