Passive Activity Losses and Sec 1231 Gains

[llooll]

Hello!

I have a client with an S Corp K-1.  The underlying activity is short-term rentals.  Thereby resulting in Ordinary Income/Loss rather than Rental Income/Loss.  During the year, the S Corp sold one of the properties resulting in a Sec. 1231 gain.  The entity generated an Ordinary Loss for the year on the short term rental activity.  My client does not materially participate in the S Corp so it is classified as a passive activity.  I feel I should know the answers to at least question 1 below but it's been a long week.

Question 1:  Does the Ordinary Loss (Passive) offset the Sec 1231 gain (also passive I believe)?

Question 2:  If so, how do I have Lacerte show that on the forms?  Currently the 1231 Gain is going to Form 4797.

To complicate matters further, this entity is the result of a split of two partners from a third partner in a previous S Corp entity (same passive categorization for my client).  The split was a contribution of the two partner's assets from the old entity to the new entity.  Therefore not a taxable disposition.  They still have unallowed passive losses from the original entity.  It would seem to me that these losses would follow the new entity.

Question 3:  Do I need to attach a statement and group the two entities (although they will no longer receive K-1's from the first entity) or can I simply put the carryover unallowed passive losses in the history of the second entity on the K-1 screen?  

Question 4:  Would these carryover unallowed passive losses then be available to offset the Sec 1231 gain as well?

Question 5:  I read a prior question similar to this that mentioned Sch E and checking the complete disposition box.  Would that apply here?  If so, how, as the entities do not show up on the Sch E screen (they do appear on page 2 of Sch E when Iook at the forms).

Any help is appreciated!