Why would land rent in a decedent's trust reported on 1041 show on line 5 of the K1 as other portfolio income rather than line 7 as net rental income?

[Ceedee4572]

This is the initial year of a decedent's trust with 5 beneficiaries sharing equally.  The decdent has had land rent for years, no expenses other than property taxes.  There is nothing to manage.  Clearly a passive rental.  The rent is reported on Schedule E as Land, and flows to Line 5 of the 1041, Rents, royalties, etc.  On the K1's it is not showing up on Line 7 where I would expect it as net real estate income, but is on Line 5 as non passive other portfolio and nonbusiness income.  I must be missing something, but I don't know what?

[rbynaker]

Rent from unimproved land has a special carve-out.  Here's an article that popped up when I googled:

https://www.cohenco.com/knowledge-center/insights/april-2018/the-tricky-business-of-classifying-inco...

The example in the article is for a parking lot but the rules also apply in other areas.

[Ceedee4572]

Thank you!  There is always something new to learn; I had no idea.

Appreciate you taking the time.