Hi,

Sch E rental loss could not deduct due to income limit.

But if they have a K1 from a LLC ( a rental property owned by LLC), two partners (husband and wife) both actively manage day to day business, only one is General manager.

The LLC has rental loss abouyt $11k first year, Is this loss deductible? 

On K1 input screen:

I checked the box  "Actively participated in real estate",  loss can not deduct.

But if I check the box of "Not A Passive Activity" - the $11k loss deducted as nonpasive loss on p2 SchE and flowed to Sch 1 line 5.

Is that make sence? Rental loss can be deducted through LLC but not on Sch E???