Schedule K-1 (Form 1065), box 3
Box 3: Other net rental income (loss)
Your share of net income or loss from rentals that are not real estate, such as leased equipment. Often blank.
What box 3 reports
Your share of net income or loss from rental activities other than rental real estate.
Most K-1s leave this box empty. When it has a number, check whether the partnership leases equipment, vehicles or similar property.
Where it goes on your return
Schedule E, Part II
The common case
Reported on Schedule E (Form 1040), Part II, line 28. Box 3 is usually treated as passive, and a loss goes through Form 8582 first.
When it depends on you
Exceptions to the passive treatment of rentals exist. See the Partner's Instructions for box 3 and the Instructions for Form 8582.
A real example line
Below, a line written the way the document text arrives, run through the same reader as your upload. The reader matches the box number and the IRS label, then reads the amount, so it still finds the line when the scan is noisy.
| Line as the engine reads it | Box | Recorded value | Status |
|---|---|---|---|
3 Other net rental income (loss) 1,025 | 3 | 1,025 | Read |
Check before you enter it
- Do not combine box 2 and box 3 when entering them: tax software asks for them on different lines.
In the K1 FastTax output
CSV column: box_3. In the checklist a line looks like Schedule K-1 (1065) screen, box 3. All CSV columns.
Official source
The IRS text for every box is in the Partner’s Instructions for Schedule K-1 (Form 1065). Use the edition for the tax year printed on your K-1, because box wording and code lists change.
Plain answers
Questions about box 3
Where does box 3 of a Form 1065 K-1 go on my return?
In the common case box 3 is reported on Schedule E (Form 1040), Part II, line 28. It is usually treated as passive, and a loss goes through Form 8582 first. Exceptions to the passive treatment of rentals exist, so see the Partner's Instructions for box 3 and the Instructions for Form 8582.
Why is box 3 empty on my K-1?
Box 3 is for rental activities other than real estate, such as leased equipment or vehicles. Most K-1s leave it empty, so a blank box 3 is normal. K1 FastTax leaves the cell empty instead of writing a zero and lists the box as blank in the checklist, so you know there is nothing to enter.
How is box 3 different from box 2?
Box 2 is rental real estate. Box 3 is rental of anything else, such as equipment. Do not combine them when you enter them, because tax software asks for them on different lines. If box 3 has a number, check whether the partnership leases equipment, vehicles or similar property.
What if box 3 is a loss?
A number in parentheses is a loss. Box 3 is usually treated as passive, so the loss generally goes through Form 8582 before it reaches Schedule E, and it may be limited or carried forward. See the Instructions for Form 8582 and the Partner's Instructions.
Does box 3 count as self-employment income?
Box 3 is a rental item and is not automatically included or excluded. The partnership reports any self-employment earnings in box 14, code A. Check box 14 and the Instructions for Schedule SE if the partnership leases property as part of its business.
Box 3 shows a code or STMT instead of a number. What do I enter?
Box 3 does not normally have codes. STMT or an asterisk means the amount is on a statement attached to the K-1, so read the statement for the figure. K1 FastTax does not guess: it leaves that CSV cell empty, names the box in needs_review and adds the line to the review list. A code letter printed next to an amount in a box that has no codes is held for review the same way, so check it against the paper K-1 and the Partner's Instructions for Schedule K-1 (Form 1065).
Which CSV column holds box 3?
Box 3 is in the box_3 column, a plain number with a leading minus for a loss. An empty box 3 is an empty cell, not a zero.
Is box 3 the same on a Form 1120-S or Form 1041 K-1?
Box 3 is also other net rental income (loss) on a Form 1120-S K-1. On a Form 1041 K-1 the equivalent is box 8, other rental income. Box numbers differ between forms, so read the label.
Related boxes
Read box 3 from your own K-1
Free: 1 file per day, up to 10 pages, no account. Nothing is filed and nothing is entered into tax software for you.