How do you code cancellation of debt from a passive K-1 activity as passive in Lacerte?

[Continuouslearner]

I have a partnership K-1 that has a passive loss carryover that is an entirely passive activity that generated cancellation of debt income that is deemed to be from a passive activity.  How do you code this in Lacerte so that it offsets the passive loss carryover? The input for cancellation of debt for the K-1 is on screen 20.1 line 11E which correctly carries to Other Income Line on Schedule 1, but doesn't impact the 8582 nor generate a release of the passive losses carried over on Sch. E.

[PhoebeRoberts · Accepted solution]

Personally? I run it through Separately Stated Income and Deductions as a passive item. I'm unaware of any good method for adjusting the 8582 for things like this or other less-common situations.

If I were feeling particularly unhappy with not having the amount on Schedule 1 / former Line 21, I might be inclined to enter it both places, then back it out with a kludgy workaround, or just disclose the presentation on Form 8082.

[sjrcpa]

I do what Phoebe does.

[Continuouslearner]

Thank you Phoebe!  You are faster than Support help as I am still on hold with them.  Have a blessed day Phoebe!

[Continuouslearner]

Thank you!  Have a blessed day srjcpa!

[sjrcpa]

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