How do I get income from Box 11 of a K-1 to show up as passive income on Schedule E instead of as nonpassive income?

[cjc05]

The amount reported in Box 11 of the K-1 is showing up as Nonpassive income in column (k) in Part II on Page 2 of Schedule E.  It should be showing up as Passive income in column (h) instead.

[tagteam · Accepted solution]

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@cjc05 wrote:

The amount reported in Box 11 of the K-1 is showing up as Nonpassive income in column (k) in Part II on Page 2 of Schedule E.  It should be showing up as Passive income in column (h) instead.

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You are most likely going to have to do an override (which voids the TurboTax accuracy guarantee and inhibits e-filing your return) in order to get that treatment.

First, however, you will have to enter a description and amount in Forms Mode (see screenshot) on your K-1 and note that you will need to be using a desktop (installed) version of TurboTax to enter Forms Mode.

[Anonymous]

what type of description is given for this item?  it can't be done through line 11 unless it's a passive capital gain but then it would not flow to page 2 of schedule E  in any case

your choices are to combine it with line 1 or 2 amounts (you can add supporting detail) or create a second K-1 put on line 1 with supporting detail.  this should allow you to e-file.  could you get a notice from the IRS. It's possible but then yo write back with an explanation that line 11 was included on ......... 

[Dece80]

1065 Box 11 A shows Other Portfolio Income with no notes. The Private Limited Partnership tells me it is "unapplied transaction fees."There are no details on Desktop Premier to get this into passive income. Should I just put it in Miscellaneous?  If I choose the 'put it in E' option it lands in the non-passive box, which makes no difference to my taxes.  Which of the evils is better?  I do not want to override and have to file by mail.  The post office is busy enough.  Thanks!

[Dece80]

Thank you for asking this! This is not addressed anywhere in IRS instructions.  I have the same issue.

[Dece80]

Has anyone figured out how to enter 1065 Vox 11A so that it transfers to E Line 28 (H) Passive Income?  Is it OK to just add this other portfolio income - in this case RETURNED TRANSACTION FEES - to line 1 as though it were ordinary passive income?

[PatriciaV]

@Dece80

If you are using TurboTax for Desktop, you may be able to report the amount from Schedule K-1 Box 11 Code A as passive income on Schedule E page 2 using Forms Mode. 

Open the K-1 Partner worksheet, on line 11 enter Code A and the amount. Then click the QuickZoom link to open K1P Addl Info. 

Under Box 11 Code A Line 5, enter a description and the amount. 

Now check Schedule E, p2 to confirm the amount is included under Passive Income/Loss.

If this doesn't produce the result you need, then add the Code A amount to a passive income line for this Schedule K-1.

[Dece80]

Thank you, Patricia!  Neither the worksheet nor the step-by-step populates to Schedule E  as passive.  And overriding directly to Schedule E, line 28 fails to find my  loss rollover, and apparently disables e-filing.  This is bizarre - the "other portfolio income" is something called "returned transaction fees" which exists nowhere in Google-land or on the IRS site.  The accountant at this very large partnership tells me it belongs in E as passive.  What if I simply added it as ordinary income?  When the IRS matches it and sees that I OVERSTATED ordinary income, might they still ask me to correct?  Is there anywhere I could ram this number in without having to paper file?  Thank you so much!

[PatriciaV]

You may include this amount with any other passive income reported on the Schedule K-1. In most cases, the change in category will go unnoticed.

[Dece80]

Thank you, Patricia!  You are wonderfully responsive.  Really grateful.