topic Re: K-1 part 111 not functioning correctly in Business & farm

K-1 part 111 not functioning correctly

WilHen02 — Wed, 11 Feb 2026 06:19:06 GMT

With Activity box for rental checked and no entry for line 1 ordinary income, when I uncheck material participation, taxes due climbs by thousands.

I understand what should be happening for material participation for line 2, but not when checking and unchecking a zero amount on line 1 when "activity" should not be linking to line 1 anyway.

Re: K-1 part 111 not functioning correctly

PatriciaV — Wed, 13 Mar 2024 15:56:49 GMT

If you have no ordinary business income on Line 1 of Schedule K-1, do not check any boxes under that line. For Rental Income, check only the boxes under Line 2. Also, do not enter a zero on any income line.

Re: K-1 part 111 not functioning correctly

WilHen02 — Wed, 13 Mar 2024 18:34:57 GMT

To better phrase my problem. We do qualify as real Estate Professionals with an LLC for our rental units. I have not been able to get TT H& B to not treat the current loss as passive income, which limits the loss to 25K. I can do it by the previously described hack method. I am coming to the conclusion that TT has no method of processing Real Estate Professional rental losses. Not within E nor within K-1s. The K-1 does not have a drop down for R.E.P.s where the Active and Passive dropdowns are shown on the K-1.

I would expect the required statement could be attached as a scanned attachment were there a way to get TT to correctly treat the loss as an active loss.

Re: K-1 part 111 not functioning correctly

WilHen02 — Thu, 14 Mar 2024 23:25:02 GMT

Schedule E page 2 line 43 should Report all rental loss for a Real Estate Professional as fully deductible. It does not.

Schedule K-1 continues to incorrectly treat REP loss. K-1 will not carry over to pg 2 of Sched E.