How do I break an outline letter's path?

I'm not quite sure exactly how you want to "break" it, but usually one would use tools like Pathfinder, Shape Builder tool, Knife tool, Shaper tool or Eraser tool.

There are some other ways as well.

fanbrahms,

As I (mis)understand it, is everything as desired if you have the letter ungrouped and as a single/compound path, and you have the rectangle as a single pathe on top, then select both and Pathfinder>Minus front/Subtract?