Trust that rents out land for farming. Tax return was done by professional tax prep since 2021 and decided to try to do it myself with TurboTax Business. TurboTax is treating the income on the K1 as line 5 verses the tax professional had it on line 7 (Net Rental Real Estate Income). I've followed the 1041, Schedule E from the prior years and it still comes up as non-passive income verses passive income. Not sure what I am missing.
With respect to the rental of land, losses are passive and profits are nonpassive.
If the software is not handling the rental in that manner, call customer service.
I understand passive vs non-passive but why is the land rent on line 5 verses 7 on the K1?
You have to ask the preparer of the return. Line 5 gets reported in Column (f) of Schedule E, Line 33 while Line 7 can be reported in Column (d) or (f).
Nothing is showing on line 33 of the Schedule E in any column. I've indicated on line 1b of Schedule E that the type of property is 5 - Land. I've indicated on line 3 of Income that its Rents received. Note that form 8582 that TurboTax is not populating nor will it allow me to populate Part IV which the professionally prepared return does have populated. Everything else matches other than where TurboTax populated the land rent to live 5 on the K-1 verses line 7.
If you're using Turbotax Business, I can't help you as I don't have that program. I was under the impression that you were entering information from a K-1 into a personal version of Turbotax.
As I noted earlier, if the K-1 has an entry in Line 5 (positive), it will appear on Line 33 of Schedule E in the (f) column. If it has an entry on Line 7 (positive), it will appear on Line 33 in the (d) column.
Thanks. I'll post in another Community to get a reply.
@tax2016sdk wrote:Thanks. I'll post in another Community to get a reply.
You can try but you'd probably be better off contacting customer support.