Partnership K1 Loss - Does my client have to take his K1 loss on his 2021 tax return?

[catherine3]

My client has a K1 loss of $13,769 from a multi member LLC. Does he have to take this loss this year? Can he take it in 2022 or spread it out over several years? If yes, how do I do that. Thank you.

[Just-Lisa-Now-]

You cant pick and choose when to use it, so no, you cant spread it out over multiple years....but does he have enough basis to allow taking a loss?

[catherine3]

I think he does. The ending capital account is $28,833. However, they have $7,117 in nonrecourse and $35,396 in qualified recourse liabilities. The loss is only 13,769. 

[sjrcpa]

Is it a passive activity?

[catherine3]

It is not passive. He participates in the running of the business.

[sjrcpa · Accepted solution]

Then the loss goes on this year's return.