short term rental on K-1

Shouldn't that have been taken care of by the partnership on the 1065 when it issued the K-1s?

No, that's taken care on the personal return since not every partner meets the criteria of the short term rental. 

How about indicating the K-1 is not passive? There has to be a way.

Plenty of people get K-1s that are not from passive activities. Think a law firm partner, for example.

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@taxmanjcs wrote:

Short term rentals loophole tests:

1. Spend 100 hours and more than anyone else

The software does not have a box to check on the K-1 input for partnerships to change the nature of the losses from passive to non-passive.

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It is not a "loophole"; it is intentionally how the Regulation was written.

It is for Material Participation of a short-term rental; you listed just one circumstance that results in Material Participation. 

Yes, it would be nice if there was a checkbox, but just enter it in Box 1 of the K-1 worksheet (as well as the Material Participation checkbox).