Part II, Item L of 1065 K-1

[ptax255]

Hello, 

I have an individual client with a K-1 from a trader hedge fund. The K-1 reports some interest/dividends/capital gains. In the supporting footnotes, there's a section about net taxable loss, which I see is a reduction to the basis. Would this loss be deductible in the individual return as ordinary loss? Nothing was reported on box 1. Thanks!

[sjrcpa]

I'm sure that K-1 has a lot more numbers on it than just Line 1.

[ptax255]

Yes, interest, dividends and capital gains

It's a trader hedge funds, meaning investment income but ordinary losses, I assume that's what the net loss is. Would it be deductible, if so where?

[sjrcpa]

Read through all the pages of the K-1 and the book of instructions that came with it.

Likely the loss on Schedule L is the sum of a whole bunch of other stuff on the K-1

[ptax255]

Not much instructions unfortunately.  And many say "consult your tax advisor". Do you know where would I enter it in Proseries?

[sjrcpa]

Probably nowhere. Enter the lines from the K-1.

[ptax255]

That's what I thought, just didn't want to lose out on any potential ordinary losses for the client. Thank you