Section 1231 loss on Schedule K-1

[Angie Jay]

I invested in a syndication and on the Schedule K-1 Box 10 " section 1231" I have a loss. I am confused as to how to report this. Below are two thoughts I have, not sure which is correct. Would appreicate anyone can provide some assistance. 

1. The instruction stated it should go on form 4797, and the loss is subject to unallowable loss limit. Since I didn't participant, it would be passive loss, so it makes sense to me. However I also have a loss on box 2, do I report them both combined? or separately on form 8582? I can't seem to find any answer on this. 

2. I wen through entering form 4797, it didn't really refering it to Form 8582 and at the end of the form it's asking to enter it on Schedule 1. I feel like it's treating it as an active loss.

Hope I make sense here. First time doing this. 

[Michael Plaks]

Quote from @Angie Jay:

I invested in a syndication and on the Schedule K-1 Box 10 " section 1231" I have a loss. I am confused as to how to report this. Below are two thoughts I have, not sure which is correct. Would appreicate anyone can provide some assistance. 

1. The instruction stated it should go on form 4797, and the loss is subject to unallowable loss limit. Since I didn't participant, it would be passive loss, so it makes sense to me. However I also have a loss on box 2, do I report them both combined? or separately on form 8582? I can't seem to find any answer on this. 

2. I wen through entering form 4797, it didn't really refering it to Form 8582 and at the end of the form it's asking to enter it on Schedule 1. I feel like it's treating it as an active loss.

Hope I make sense here. First time doing this. 

Your tax software should have a worksheet on which to enter K-1 numbers, including this loss. Look for something like a "K-1 worksheet." The software then takes the numbers and puts them where they belong.