topic K1 - Passive or Non-Passive in Get your taxes done using TurboTax

K1 - Passive or Non-Passive

jumping421 — Wed, 11 Feb 2026 10:28:48 GMT

I have a K-1 from the following, but I'm not sure if these are passive or non-passive losses.

- K-1 for the investment fund that I work for and for which I invested capital to the fund

- K-1 for my carried interest in the fund I work for

- K-1 in an employee fund that invests in companies. I invested capital to the employee fund.

Since i provide services to the fund, is this non-passive activity?

Re: K1 - Passive or Non-Passive

Anonymous_ — Sat, 21 Dec 2024 17:22:44 GMT

Re: K1 - Passive or Non-Passive

Mike9241 — Wed, 25 Sep 2024 19:07:52 GMT

passive activity is defined in IRC 469

(c)Passive activity defined
For purposes of this section—
(1)In general
The term “passive activity” means any activity—
(A)which involves the conduct of any trade or business, and
(B)in which the taxpayer does not materially participate.
(2)Passive activity includes any rental activity
Except as provided in paragraph (7), the term “passive activity” includes any rental activity.

(h)Material participation defined
For purposes of this section—
(1)In general
A taxpayer shall be treated as materially participating in an activity only if the taxpayer is involved in the operations of the activity on a basis which is—
(A)regular,
(B)continuous, and
(C)substantial.
(2)Interests in limited partnerships
Except as provided in regulations, no interest in a limited partnership as a limited partner shall be treated as an interest with respect to which a taxpayer

Re: K1 - Passive or Non-Passive

jumping421 — Wed, 25 Sep 2024 19:19:23 GMT

Thanks - yes, I saw those regulations. It sounds like since I work full time for the funds, this is material participation.

Re: K1 - Passive or Non-Passive

Mike9241 — Thu, 26 Sep 2024 00:55:12 GMT

I would agree these would not be passive items.