Schedule K-1 box 11 code zz

[knegaard]

On desktop TT, why is my schedule K-1 box 11 code ZZ enter via step-by-step and found on K1P in the Code ZZ section not flowing to form 8582?  I said I didn’t materially participate in the step-by-step (so it should know it’s passive) and I even went into form and put the loss on line 2 of the K1P additional information document for Code ZZ, not line 1 which is non-passive, but it doesn’t flow to 8582 as a passive loss as it should. 

[AnnetteB6]

Items entered on line 2 of the K-1P for Code ZZ must be entered manually, they will not transfer to another form in your return automatically.  You generally have to look at the K-1 instructions to determine what the value represents and then add it to your return on the appropriate form.

In your case, you stated that it represents a passive loss that should go to Form 8582.  One way to have this value flow to Form 8582 is to create a duplicate K-1 in your return by entering only the heading information and a single entry in the data section of the K-1.  Enter the loss in box 1 for business income/loss in the duplicate K-1.  Then, the loss will flow to the Form 8582 to offset any passive income being reported.

[knegaard]

Annette,

Thank you for the suggestion.  I didn’t realize line two on the K1P document for the Code ZZ wasn’t supposed to flow anywhere.  I did what you said and the loss was accepted up to the passive income I had on the K-1 and the rest of the loss shows up as a carryover.

Going to try and file amended soon.  

Thanks,

Kraig 

[Mike9241]

11zz is not handled directly by TurboTax. It needs to be detailed on a subworksheet, with the taxpayer being responsible for entering on the correct line. The options are: line 1  - other non-passive income - reported on page 2 of Schedule E. Being non-passive, it won't flow to Form 8582 or line 2  other. This is a headache because TurboTax does nothing with it. You are required to figure out what form or schedule it should be entered on and then enter it yourself.