How to handle schedule K-1 box 5 and 8?

[parckpan-yahoo-c]

Hi,

I received a schedule K-1, it has box 1, 5 and 8, -$25681, $60 and $9768. From the provider, it should be passive lost. However, When I entered those numbers, it is increased tax payment a lot, coz box  5 and 8 are consider as the other category income. Could you please let me know where I am wrong and how to make it correction?

Thanks.

[nexchap]

Returns on the partnerships investments (interest in box 5, cap gains in box 8 or 9) aren't passive.  As a partner, you report them on your return and pay tax on them this year.  Because you didn't actually receive any cash, those items increase your basis so that your future tax bill -- when you sell -- will be smaller.

[parckpan-yahoo-c]

So, in this situation, even actually lost without receiving any cash, to pay more tax can take the advantage? That's the reasonable plan? And Turbo Tax entering are right?

Thanks.

[nexchap]

Entering all the data into the K-1 interview will result in the correct tax.  BUT, when it comes time to sell, Turbotax will not calculate your correct basis.  You'll have to do that using the information provided on the K-1.

[parckpan-yahoo-c]

Thank your help!