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Level 2

Question

Schedule K-1 (form 1065) Nonpassive Loss

Forum|Forum|3 years ago
March 4, 2023
1 reply
0 views

I received a Schedule K-1, which reports an Ordinary Business Loss on line 1. The materials with the K-1 states that the trading activity involved in the business is not a passive activity and therefore the amount on line 1 should be reported as nonpassive [Schedule E, Part II, line 28, column (i)]. How do I indicate this income is nonpassive in TurboTax?

Level 15

Most likely you will have to indicate that you materially participated in order to get the loss into that column.

tcampbellctAuthor

Level 2

Thanks. When I searched more globally for this issues, another tax software suggested that the user consider creating a 2nd K-1 entry for the amount on line 1, and mark it materially participated.

By the way, the K-1 entity referenced regulation section 1.469-1T(e)(6)