A is a non-passive general partner of X LLC, which invests in Y and Z partnerships. Year end, X LLC receives two Schedules K-1 from Y and Z, in which all the income/loss flow through to X LLC's Form 1065. When A reports the income/loss from X LLC's K-1 on his Form 1040, should he treat all the items as passive income/loss (ordinary business income, COD income, Sec 1231 Loss, Misc Business Deductions) because he doesn't participate in Y and Z? Ultimately, does the characteristic of other partnerships remain as is once it gets to Form 1040? Or is it determined at the individual Form 1040 level no matter what type of business the LLC is involved in?