Changing K1 1065 rental income/loss from Passive to Non-Passive

[Radha]

Client qualifies to treat rental losses as non-passive and offset the loss against regular income. The rental is a short term rental & the client actively & materially participated in the activity. How do I get ProSeries to change it to Non-passive? I have checked the box for active & material participation and the box indicating that the rental property is subject to recharacterization rules. Nothing is working. I cannot check the box  in the Info Worksheet indicating that the taxpayer is a Real Estate Professinal since he is not. I am at my wits end trying to get this return done, please help

[George4Tacks]

500 hours to be non passive? https://www.irs.gov/publications/p925#en_US_2023_publink1000104581 

[Accountant-Man]

If he is a limited partner in the 1065, he cannot qualify as non-passive. Is he an LP?

ps Rental income is almost always passive, unless it is short-term yada yada, which would then qualify as Business income, K-1, line 1.

[Radha]

I know that the income is non-passive (I have done extensive research and am positive that it is non-passive). I need help in changing it to non-passive in ProSeries.

[Radha]

He is a general partner and I have indicated as much in the K1 screen in ProSeries

[Radha]

I know that the income is non-passive (I have done extensive research and am positive that it is non-passive). I need help in changing it to non-passive in ProSeries.

[Terry53029]

I believe you may be confusing income from a K1 on line 1 (income from a trade or business) which can be passive or non-passive depending on facts. Income from line 2 (rental income) is normally passive unless your client is a Real Estate Professional.  

[Accountant-Man]

What Terry said. It sounds like the 1065 is wrong.

[Radha]

As I mentioned, I did extensive research on the topic and I know that the rental loss is non-passive. I am looking for help with ProSeries data entry to change the treatment from passive to non-passive

[Jim-from-Ohio]

Without taxpayer being a real estate professional, how did you come up with that the losses can offset other income?

[TaxGuyBill]

If it is non-passive, enter it in Box 1 of the K-1 worksheet in ProSeries.