If you are seeing the Red Alert Error or Omission: Ordinary and Rental Activities on Single Schedule K-1 when reviewing your return, this is due to entering an amount in both the Ordinary business income or loss field for the Schedule K-1 and the Net rental real estate income or loss. This alert includes passive activity losses originating in prior years reported in Box 1 and 2 of Schedule K-1. These two types of income have conflicting calculations because of the recently added Qualified Business Income Deduction; TaxAct requires that you enter the income/loss on two separate K-1's. To move Box 2 amounts to a separate Schedule K-1, please follow these steps:

1. From within your TaxAct return (Online or Desktop-Q&A View), click Federal (on smaller devices, click in the top left corner of your screen, then click Federal).
2. Click the Business Income dropdown, then select Partnership income (Form 1065 Schedule K-1) or S Corporation income (Form 1120S Schedule K-1).
3. Click Review for the Schedule K-1 already created and then proceed to the screen titled [the name on your Schedule K-1] -Box 2 - Rental Income Review.
4. Click Delete, then proceed through the questions verifying the entries on each screen until you are taken back to the Federal Quick Q&A Topics page. Now you will add the second Schedule K-1.
5. Click Business Income to expand the category and then click Partnership income (Form 1065 Schedule K-1) or S Corporation income (Form 1120S Schedule K-1).
6. Click Add to create a separate Schedule K-1. Enter the same business information and report only your income, deductions, and credits based on your rental activities.

If the alert is being caused by passive activity losses originating in prior years from Box 1 or 2, these amounts will also need to be reported on a separate Schedule K-1. Please follow these steps:

1. From within your TaxAct return (Online or Desktop-Q&A View), click Federal (on smaller devices, click in the top left corner of your screen, then click Federal).
2. Click Business Income to expand the category and then click Partnership income (Form 1065 Schedule K-1) or S Corporation income (Form 1120S Schedule K-1).
3. Click Review for the Schedule K-1 already created and then proceed to the screen titled Partnership - Prior Year Losses and click Yes to remove the necessary entries.
4. Proceed through the questions verifying the entries on each screen until you are taken back to the Federal Quick Q&A Topics page. Now you will add the second Schedule K-1.
5. Click Business Income to expand the category and then click Partnership income (Form 1065 Schedule K-1) or S Corporation income (Form 1120S Schedule K-1).
6. Click Add to create a separate Schedule K-1. Enter the same business information and report only your income, deductions, and credits based on your rental activities that were previously removed.