I entered it in the appropriate spot on the K-1 input screen. It didn't go anywhere in the return. Then you get a diagnostic that tells you to read the partners instructions. All that does is tell the preparer of the K-1 to attach a schedule to the k-1. I suppose I could learn everything about Subpart F, then include it in the return and adjust the basis schedule if necessary. I was hoping someone already knows the answer!
Yes, "I should figure out what kind of income this is, and the appropriate tax treatment and presentation, because my client is relying on me to competently prepare their return" is the right answer.
My file note says I treat Subpart F income as nonqualified dividends, which is the same tax treatment as any other ordinary portfolio (non-passive) income. I assume it's already been included in the foreign-source information. My note contains no statutory or other authority for either of those conclusions, meaning my answer is no more reliable than any other random person's uncited conclusion!
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