bjscheel
Level 3

Partnership has two rental real estate activities.  Both are passive activities.  One is a net loss this year, the other has net income.  Neither have the box checked for "property is not a passive activity".  Both are marked for not being a qualified business. 

Other than the income and expense figures, the inputs are identical; however, the first one (loss) is showing up on K-1 as Passive and the second is showing as Non-Passive (this is on a "Supplemental Information" page 2 attachment to the K-1).  I can't see any way to make it say Passive.  From what I read, passive should be the default...

ETA if I put in an amount to make the second one a loss, it changes to Passive.  Why isn't it defaulting to passive regardless?

ETA I see others have posted on this issue and no solution.  This is happening on all our similar partnerships.  Lacerte need to fix this?  In the meantime, I presume the partners can report it as passive income?

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