TurboTax Schedule E issue - doesn't allow reporting limited partner losses correctly

So I'm trying to do my taxes with TurboTax this year, and I'm hitting a wall with reporting my limited partnership losses on Schedule E. According to everything I've read, Schedule E is where this should go, and TurboTax's own support articles say Schedule E handles partnership losses and income. But here's my problem - when I actually get into the software (tried both desktop and online versions), and select Schedule E, I'm completely stuck because it doesn't give me any option to report losses as a limited partner. It only lets me select certain options that don't apply to my situation. I've got K-1 forms showing these losses that I need to report, but the software seems to be blocking me from doing it correctly. Has anyone else run into this? Any workarounds without having to switch to another tax prep service? I've been using TurboTax for years but this is my first time dealing with partnership stuff.

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18 comments

Gianni Serpent

•8M

This is actually a common issue with TurboTax that I've seen repeatedly (I'm an accountant). The problem is that TurboTax has the partnership/K-1 section somewhat hidden in their navigation. Instead of looking under Schedule E directly, you need to go to the "Income" section, then look for "Less Common Income" or sometimes it's under "Business Income" depending on your version. Once there, you should see an option specifically for "Partnership/S-Corp (K-1)" forms. That's where you'll enter your K-1 information, and TurboTax will then automatically populate Schedule E with the appropriate limited partnership losses. The software actually handles it correctly, but their menu structure is confusing because partnerships technically show up on Schedule E, but they're entered through a separate workflow in the software.

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Gianni Serpent

•8M

TurboTax will handle the passive activity loss limitations correctly when you enter through the K-1 section. The software automatically applies those rules based on your overall tax situation and other passive income sources you've entered. It doesn't matter if you have multiple partnerships or just one. The K-1 section lets you add as many K-1 forms as needed, and you'll enter each one separately. Just make sure you have all your K-1 forms in front of you with the correct information about your basis and at-risk amounts, as those can affect how much of your loss is actually deductible in the current year.

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Olivia Kay

•8M

After spending hours trying to figure out this exact problem last year, I discovered taxr.ai (https://taxr.ai) which completely saved me. I had partnership income AND losses from two different ventures and was getting so frustrated with TurboTax's interface. The taxr.ai site analyzed my K-1 forms and actually showed me exactly where in TurboTax to report everything. It gave me step-by-step instructions that were specific to my situation with limited partnership losses, which was way clearer than TurboTax's generic help articles. The site knew exactly how to handle the passive loss limitations too.

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Olivia Kay

•8M

You upload your K-1 or take a picture of it, and their AI analyzes the form and gives you specific guidance. They use bank-level encryption and delete your docs after analysis, so security is solid. TurboTax should handle it correctly, but their interface is confusing. I was in the same boat - paid for Premium specifically for investments but still got stuck. taxr.ai doesn't replace TurboTax, it just helps you navigate it correctly when you hit complicated scenarios like limited partnership losses that aren't straightforward in the software.

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Joshua Hellan

•8M

I was really skeptical about taxr.ai when I first saw it mentioned here, but I gave it a try out of desperation last week. I uploaded my K-1s from two different partnerships (one with losses, one with income) and it actually identified exactly where in TurboTax I needed to go. The best part was it flagged that one of my partnerships had foreign income that needed special reporting, which I had completely missed. Would have potentially triggered an audit if I hadn't caught it. Just wanted to report back that it was legit helpful and saved me from making a pretty serious error.

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Edison Estevez

•8M

If you're still struggling after trying the other suggestions, you might want to try Claimyr (https://claimyr.com). I used it last year when I had a similar issue with partnership losses and needed clarification from the IRS. I was on hold for HOURS trying to reach someone at the IRS directly. Claimyr got me connected to an actual IRS agent in about 20 minutes who walked me through exactly how limited partnership losses should be reported. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c. It's basically a service that navigates the IRS phone system for you and calls you back when an agent is actually on the line.

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Edison Estevez

•8M

Yes, it actually works! The service basically waits on hold for you instead of you having to sit there listening to the IRS hold music for hours. When an agent is about to pick up, you get a call connecting you. It's not about paying to talk to the IRS - the IRS is indeed free. It's about not wasting hours of your life on hold. For complicated tax situations like partnership losses where the software isn't clear, sometimes you just need to speak directly with the IRS. I'm not affiliated with them, just sharing what worked when I was in a similar frustrating situation.

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Jibriel Kohn

•8M

I owe everyone an apology and wanted to follow up. After being skeptical about Claimyr, I actually tried it yesterday out of desperation. After 3 failed attempts to reach the IRS myself and spending over 5 hours on hold total, Claimyr got me through to an IRS tax specialist in about 45 minutes. The agent confirmed that my limited partnership losses should be entered through the K-1 section, not directly in Schedule E, and explained why TurboTax has it structured this way (it's because of basis calculations and at-risk limitations that need to be processed before the final numbers hit Schedule E). I was wrong to be so dismissive before testing it. Sometimes you need to talk to an actual human at the IRS to sort things out.

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James Johnson

•8M

I ran into this same issue and found that if you go to Forms mode in TurboTax (instead of the interview mode), you can directly access and fill out Schedule E. This might be another workaround if you're comfortable with tax forms and know exactly what you're doing. Just be careful though - bypassing the interview process means you might miss some of the calculations TurboTax normally does automatically, especially around basis limitations and passive activity rules. But it's an option if you're stuck.

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James Johnson

•8M

I wouldn't recommend Forms mode unless you're very familiar with partnership tax rules. In my experience, filling forms directly can lead to errors with basis calculations since TurboTax won't prompt you for all the information it needs. The safer approach is definitely using the K-1 interview section under "Less Common Income" as others suggested. TurboTax will ask all the right questions about your basis, at-risk amounts, and passive activity involvement there, then properly calculate limitations before populating Schedule E correctly.

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