Form 1065 Form 8825 showing up as non-passive

[bjscheel]

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?

[PhoebeRoberts]

Self-rental?

[sjrcpa]

Or land rental?

[bjscheel]

Farm rent.

Nothing I do changes it other than if it is a loss, it marks it passive and if it is income, it marks it non passive.

[PhoebeRoberts]

Reg Sec 1.469-2T(f)(3) applies?

[bjscheel]

So the bulk of the assets involved do not depreciate.  But does that make this non-passive income?  They are not selling it.

My question is shouldn't the program default Form 8825 income to passive, unless I check the box that it is not passive?

[PhoebeRoberts]

"But does that make this non-passive income?"

Yes, by definition. Otherwise, it would be easy for every PAL to have a PIG.

"shouldn't the program default Form 8825 income to passive, unless I check the box that it is not passive"

No, Lacerte should not default to preparing the return incorrectly.