Please see attched problem. I saw simillar problem on website but mine has a few deffrences.

Thank you

Please see attched problem. I saw simillar problem on website but mine has a few deffrences. Thank you
1.Schedule E and Form 8582 Hi everyone, I’ve gotten some questions on these forms. On Schedule E, you should include both business in the first section of Part II. Since you don’t have the business names, you could call them something like “Mary Jane’s S-Corp” and “John’s Limited Partnership” or something similar. However, in that second section, you’ll only include Mary’s share of the income. You can consider her income nonpassive. As a limited partner, John’s loss is passive. Form 8582 is for John’s unallowed loss. You should fill out Worksheets 3, 5, and 6 (and from there, whichever lines in Part I correspond to them). 2. Hi everyone, I’m hoping this helps for the tax return: Basis in a partnership or S-Corp is a person’s interest in the business. It’s similar to the basis of, say, a stock. If I paid $100 for a stock, that’s my basis. If I put $100 into a partnership, that’s my basis in the partnership. Partnerships and S-Corps are “flow-through” entities, which means they aren’t taxed. Instead, their earnings are passed onto the partners/shareholders. So if a partnership with two equal partners has $200 of net income, each partner will have $100 of income. Net income increases a person’s basis, because it’s as if they’ve put more into the business by means of their share of the income. A net loss decreases their basis. When a company makes a distribution to a partner/shareholder, they’re “returning capital” to that person. They’re essentially giving back part of what the person has put into the business, which means that person’s basis in the company will decrease. This is not taxable until the person has a $0 basis. If I have a $100 basis and receive a $60 distribution, my basis is now $40. If I receive another $50 distribution, my basis is $0, and I have a $10 capital gain (because it’s an investment in the company). I hope that makes sense. In the tax return problem, their bases are large enough so that they don’t have any capital gains. If you have any other questions, let me know! 3. For the tax return, Mary’s S-Corp income does qualify for the QBI deduction. If you’re using the software, I’m not entirely sure how to get it to calculate automatically, so you’ll need to override it: “Income,” “Rental and Royalty Income,” “Qualified Business Income Deduction.” There, you just have to enter her S-Corp income (see the Module 6 discussion for a clarification between income and distributions) and enter a “1” for it being a qualified trade or business.