Question

For a K-1 partnership form I received, there are 5 check-boxes, one is "I have passive activity losses carried over from last year". Is that only for rental property?

Forum|Forum|5 years ago
May 13, 2021
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I am in a music business partnership (i.e. - writing and recording songs and selling downloads on iTunes). The K-1 partnership form is already completed professionally and I have already received it. In Turbo Tax under the section "Describe The Partnership" there are 5 check-boxes. The instructions say to check any boxes that apply. (1) I am required to pay supplemental business expenses on behalf of this partnership for which I am not reimbursed. (2) I have passive activity losses carried over from last year. (3) All of my investment in this activity is at-risk. (4) I have at-risk losses carrying over from 2019. ------- In regards to check-box

T

taxquestionsk1Author

In regards to check-box #2 "I have passive activity losses carried over from last year". Is that only for rental property, or natural resource royalties? And for #3, what does, "All of my investment in this activity is at-risk" mean?

AmyC

Employee

1. Unreimbursed Partnership Expenses (UPE) is written into the partnership agreement or it is not. Are unreimbursed expenses are part of the corporation or not?

2. Passive activity losses can't be carried over in a new business

3. You invested the money and would lose money if the business went under means at risk.

4. No carryover for new business.

Passive activity losses arise from many things. See Topic No. 425 Passive Activities – Losses and Credits

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