K1 with nonpassive and passive income - how?

Forum|Forum|1 year ago
September 12, 2024
4 replies
16 views

How do I make the ordinary business income nonpassive while maintaining passive for line 2 rental income? Seems the K1 input I get all or nothing. Both line 1 and 2 are passive (default). I can check non passive and then the rental goes with the business income to the non passive line. If I put in 500 hours, nope. I have the business income also on line 14, yet that is not triggering it. Of course, the business has a non passive loss, which is why really need it to offset other items within the return.

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Best answer by sewcpa

have the K-1 reported as 2 K-1s (I label the 2nd one xxxx-rental and show it as passive)

George4Tacks

Level 15

You can set up two k-1 input for the same K-1. One is passive and the other is non-passive.

Answers are easy. Questions are hard!

loricpa100Author

Level 5

Also a good answer - I like the idea of also noting it separately on the other post. Thank you for the speedy reply

S

sewcpaAnswer

Level 6

have the K-1 reported as 2 K-1s (I label the 2nd one xxxx-rental and show it as passive)

PhoebeRoberts

Intuit Community Champion

If you don't want to fiddle basis back and forth between 2 K-1 inputs, you can also use the Separately Stated Income and Deductions section to enter either the passive or nonpassive piece, depending on which presentation you prefer. If the $25k rental loss rule applies to your client, making the K-1 passive and entering the nonpassive loss as a separately stated item will apply the limits correctly.

Accountant-Man

Level 13

Since K-1 line 2 is rarely non-passive, does checking the box for non-passive make line 1 non-passive and line 2 is still passive?

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