Richard Imbrey,CFP,CLU,ChFC

K1 Income can be taxed as ordinary income or preferred income. Since we are not CPA's, this question needs to be asked of a tax professional for your particular situation.
I am sorry we could not be more help to you, but we can not answer a specific tax question because we are not licensed tax professionals.
Please feel free to contact us if we can be of help to you with some other financial issue.