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Where is that 1231 loss reported on your K-1? What line?
Is this from an S-Corp?
If it's from your publishing company, in which you were an active participant, it is non-passive & should be reported on Line 2 of the Form 4797 in accordance with the Partner's Instructions to the K-1:
If the amount is either (a) a loss thatisn't from a passive activity or (b) again, report it on Form 4797, line 2,column (g). Don't complete columns(b) through (f) on line 2 of Form 4797,Sales of Business Property. Instead,enter “From Schedule K-1 (Form1120S)” across these columns."