My Schedule K-1 Box-1 loss does not lower my current tax liability

Forum|Forum|6 years ago
June 5, 2019
1 reply
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I filed my taxes 2 ways - one that was joint with my spouse and also tried Married filing seperately. In either case, I had a tax liability in the thousands. I then got my schedule K-1 ( not publicly traded partnership) that indicated there was an operating loss ( Box 1) in the thousands and that was incidentally more than my current liability. I immediately assumed my liability would drop considering my partnership losses and entered the K-1 details into TT only to find that it did nothing to my liability. How is this possible?

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nexchap

If you're a passive partner, losses will be suspended until you either a) sell the partnership of b) have income from the same type of passive activity. If you look at the K-1 worksheet, you should see that the losses show up as suspended.

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panther

Is there any other reason that this could be happening? Because I'm facing the same issue of K1 losses not reducing my tax liabilties even though I'm not a passive partner.