Why is the loss on the sale of my business property showing as a passive loss on the K1 pass through?

[Maui Joe]

The sale of my S corp business property is showing up as a passive loss on my K1 pass through.  It should be active income and show up in schedule 1, line 9 on the 2020 1040 return.

[sjrcpa]

Check the data entry for the 1231 loss. There are 2 fields.

[Maui Joe]

What I am seeing is that I somehow have the S Corp set up as a passive activity since the income from the S Corp is showing up on the form 8582 worksheet.  Any idea how I can change the S Corp to active income status?

[joshuabarksatlcs]

Are you asking about (1) the input for 1120S, related to the reporting of the loss or (2) the input for 1040, related to the reporting of the K-1 items on the shareholder's return?

For (2), @sjrcpa has answered.  Line (9) Net section 1231 gain / loss has two lines.  You make the call.

For (1), what kind of activity was the sale for?   For example, if it was for a Form 8825 activity, check the non-passive box in the General Info on the 8825 input screen 21.

Note: The K-1 for 1120S has only one line 9.  For rental activities, the passive vs non-passive is reflected on the statement.