1065 Interest Income, What deductions are allowed on K-1

[Barbara-1]

I have a 1065 that only has interest income from a mezzanine loan.

I have the following expenses for this LLC:

Legal/Professional Fees

Bank Fees

Postage

Organization Costs of $250.

Can I deduct these LLC expenses since there isn't any ordinary income or would these expenses be subject to Schedule A Investment Income Expense?  

[M-MTax]

Those expenses are deductible IF you are in the business of lending money.....if not then SCH A treatment.

[Barbara-1]

Thank you for the reply!  Do I have to count interest income as ordinary income to deduct the expenses?  I don't think I do but it just looks weird to have interest income and negative ordinary income. 

[M-MTax]

Yes you do because if it's not ordinary income then it's investment income and goes on SCH K of your 1065.

[Barbara-1]

That's what I thought.  You're awesome, thank you so much!