K-1 1065 Partnership loss

Forum|Forum|1 year ago
February 19, 2025
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I have an FLP where we have land with advertising signs on it. This year the property tax on the land was more than the sign rental income. Why am I being taxed when there is a loss?

PatriciaV

Employee

Please clarify if the Schedule K-1 you received from the partnership reported a loss in Box 1 ordinary income. Did you enter all information from the K-1 into TurboTax?

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lpatterson1Author

It's a 1065, and it's a family LLLP. We just own land and the rental signs on the land. I've put in everything from the K-1. I don't have any income in Box 1. Box 3 has $2571 (rental sign income), but Box 13 has a ZZ deduction (property tax) of $2959. The deduction is not showing up in the Deductions portion of TurboTax like it did last year.

PatriciaV

Employee

You may wish to review your entries for this rental real estate activity. The property tax should be entered under Federal Taxes >> Rental Real Estate >> RRE Expense >> Taxes Paid >> Property Taxes.

Note the rental activity must first be added under Business Info >> About Your Business, and the type of business must include "Rental Real Estate."

This entry path will report the expense on Form 8825 Line 11 and will be included in the Net Income (Loss) on Line 17. This total is allocated to Schedule K-1 Line 2 Net rental real estate income (loss) based on the partners' ownership percentages.

If you would rather report this as "Other Rental Income" on Line 3, go to Forms Mode (F6) and open Form 1065 p5-6.

Enter the rental income on line 3a(1).
Then enter the property taxes on Line 3b as a positive number.
If you use this method, you will need to check the box beside the amount then add an explanation on each Schedule K-1 under Supplemental Information Smart Worksheet.

@lpatterson1

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