I received a Schedule K-1 for a passive investment showing a loss in Box 2 TurboTax shows this as an error and says there should be no entry in Box 2. What should I do?

Forum|Forum|3 years ago
April 18, 2023
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Box 2 is for net rental real estate income (loss). Why is this entry considered to be an error by TurboTax? How do I get around that?

TurboTax Online

Best answer by AnnetteB6

If you also had an entry in box 1 of the K-1, then you need to enter a second K-1 to handle the entry in box 2.

The second K-1 will have the same basic information as the first one (name, Federal ID number, etc.), but it will report the income for box 2.

As for the other items reported on the K-1, include everything but the income in box 2 on the first K-1. It should not matter which K-1 reports the other items, as long as all of the information is only entered one time.

AnnetteB6Answer

If you also had an entry in box 1 of the K-1, then you need to enter a second K-1 to handle the entry in box 2.

The second K-1 will have the same basic information as the first one (name, Federal ID number, etc.), but it will report the income for box 2.

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davidsilverman2-Author

YES....that was it! There was a 0 in Box 1 which I deleted and now it's fine!

Thanks!!!

TahoeJeff

That loss is a good thing to have. Typically you have either box 1 or 2 for passive losses and should also work with both. But I believe TTax may not support it so if you do have income/loss in both of those boxes you may need to include that K-1 as two separate K-1’s. That also happens if you have investments with different revenue streams.

davidsilverman2-Author

Agreed...the loss is a good thing to have! And as many of you have noted, you cannot have entries in both Boxes 1 and 2. TurboTax requires two different K-1s for that.