is Limited partner Line 1 income passive or nonpassive (2024)

‎July 23, 20198:44 AM

For a limited partner, that amount is usually passive. The only way it can become nonpassive is if the limited partner materially participates in the partnership, which requires one or more elements.

See Treas. Reg.§1.469-5T

Be advised that when a limited partner materially participates in a partnership, that partner will losethe benefit of protection from personal liability for the debts of the partnership and claims against it.

And that is what I thought, but TT keeps putting line 1 income from one of our PTPs in column k of schedule E line 28. I think the answer is on page 4 of the instructions in column 3. There is an overall gain (positive income) from this partnership for 2018. I think TT is reporting it as nonpassive so losses from other partnerships will carry forward to 2019.

@chaserwrote:

And that is what I thought, but TT keeps putting line 1 income from one of our PTPs in column k of schedule E line 28.

OK, it is a PTP (which was not indicated in the original post) so the rule for income is different (i.e., nonpassive) than the rule for other LPs.

Seehttps://www.irs.gov/instructions/i1065sk1#idm140366837414752

@chaser