More than one activity with losses reported on two or more forms or schedules have been entered on Part IX. Currently, due to a system limitation, Lacerte only allows one activity to be reported on Part IX for Efile purposes. This return will have to be filed as a conventional paper return.
In my case there were two K-1s with unallowed passive losses on 8582 Part IX. I removed a prior year unallowed loss on k-1 Separately Stated Income and Deductions from one of the K-1s and the diagnostic went away.
