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Does Turbotax support Form 8990? Have K-1 for ptp (mlp) reports Business Interest Exp box 13 code K. Partner instr say Form 8990 must be filed. Using Premier desktop.

 
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Level 9

Does Turbotax support Form 8990? Have K-1 for ptp (mlp) reports Business Interest Exp box 13 code K. Partner instr say Form 8990 must be filed. Using Premier desktop.

Form 8990's utility for a Personal Form 1040 is probably close to zero if not zero. 

The specific question goes to the point that the Taxpayer has received a Schedule K-1(1065) from a PTP/MLP with entries on the K-1 possibly including on Line 13 Code=K Excess business interest expense. Note that entry in TurboTax Personal the support for Schedule K-1(1065) line 13 with Code=K is noted as unsupported.  Further note, that the Form 8990 would be filed by the MLP.  However, as you can read the following, it is all most likely irrelevant since the excess business interest expense deductibility is severely limited to businesses as described below.

  • https://www.irs.gov/forms-pubs/about-form-8990

  • The Tax Cuts and Jobs Act (P.L. 115-97) amended section 163(j) to reflect a limitation on the deduction for business interest expense for certain taxpayers in tax years beginning after 2017.  
  • Background.  For tax years beginning after Dec. 31, 2017, for certain taxpayers, the deduction allowed for business interest for any tax year can’t exceed the sum of: (1) the taxpayer’s business interest income for the tax year; (2) 30% of the taxpayer’s adjusted taxable income (ATI) for the tax year; plus (3) the taxpayer’s floor plan financing interest (certain interest paid by vehicle dealers) for the tax year. (Code Sec. 163(j)(1)) Disallowed business interest may be carried forward indefinitely, subject to certain restrictions applicable to partnerships.

    In November 2018, IRS issued proposed regs on the new business interest deduction. For coverage of the proposed regs, see here for the rules for C corporations, here for the rules for partnerships and S corporations, here for the small taxpayer exemption and relation to other interest provisions, here for the election for excepted trades or businesses and the REIT safe harbor, and here for the rules for foreign corporations and shareholders and foreign persons with effectively connected income (ECI).



Scruffy Curmudgeon
PFFM, IAFF, Locals 718 & 30, retired firefighter/medic; university instructor
USAR 64-67 AIS/ASA MOS 9301 O3
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7 Replies
Level 9

Does Turbotax support Form 8990? Have K-1 for ptp (mlp) reports Business Interest Exp box 13 code K. Partner instr say Form 8990 must be filed. Using Premier desktop.

Form 8990's utility for a Personal Form 1040 is probably close to zero if not zero. 

The specific question goes to the point that the Taxpayer has received a Schedule K-1(1065) from a PTP/MLP with entries on the K-1 possibly including on Line 13 Code=K Excess business interest expense. Note that entry in TurboTax Personal the support for Schedule K-1(1065) line 13 with Code=K is noted as unsupported.  Further note, that the Form 8990 would be filed by the MLP.  However, as you can read the following, it is all most likely irrelevant since the excess business interest expense deductibility is severely limited to businesses as described below.

  • https://www.irs.gov/forms-pubs/about-form-8990

  • The Tax Cuts and Jobs Act (P.L. 115-97) amended section 163(j) to reflect a limitation on the deduction for business interest expense for certain taxpayers in tax years beginning after 2017.  
  • Background.  For tax years beginning after Dec. 31, 2017, for certain taxpayers, the deduction allowed for business interest for any tax year can’t exceed the sum of: (1) the taxpayer’s business interest income for the tax year; (2) 30% of the taxpayer’s adjusted taxable income (ATI) for the tax year; plus (3) the taxpayer’s floor plan financing interest (certain interest paid by vehicle dealers) for the tax year. (Code Sec. 163(j)(1)) Disallowed business interest may be carried forward indefinitely, subject to certain restrictions applicable to partnerships.

    In November 2018, IRS issued proposed regs on the new business interest deduction. For coverage of the proposed regs, see here for the rules for C corporations, here for the rules for partnerships and S corporations, here for the small taxpayer exemption and relation to other interest provisions, here for the election for excepted trades or businesses and the REIT safe harbor, and here for the rules for foreign corporations and shareholders and foreign persons with effectively connected income (ECI).



Scruffy Curmudgeon
PFFM, IAFF, Locals 718 & 30, retired firefighter/medic; university instructor
USAR 64-67 AIS/ASA MOS 9301 O3
-------------------------------------------------------
-------------------------------------

View solution in original post

Returning Member

Does Turbotax support Form 8990? Have K-1 for ptp (mlp) reports Business Interest Exp box 13 code K. Partner instr say Form 8990 must be filed. Using Premier desktop.

Thank you for providing details!  
Level 2

Does Turbotax support Form 8990? Have K-1 for ptp (mlp) reports Business Interest Exp box 13 code K. Partner instr say Form 8990 must be filed. Using Premier desktop.

Your answer is incorrect though. The partners tax basis is reduced this year by the amount of the K-1’s Line 13 Code K excess business interest income, but you don’t get the deduction this year, you get it in a future year when that same entity has enough excess taxable income or excess business interest income (Line 20, Code AE and AF respectively).  But you need to file form 8990 to carry it forward. So it does have utility for the taxpayer, and is a required form if you have a Line 13 Code k entry.
Level 15

Does Turbotax support Form 8990? Have K-1 for ptp (mlp) reports Business Interest Exp box 13 code K. Partner instr say Form 8990 must be filed. Using Premier desktop.

" This is a K-1 received on my personal tax return vs. an entity return."

None of the TurboTax personal income tax preparation products support Form 8990 (see screenshot).

See generally https://digitalasset.intuit.com/DOCUMENT/A5FP7N8Ic/2018-unsupported-calcs-L1FQfTTgn-1.pdf

If you need the form then, unfortunately, you will have to prepare it manually and then print and mail your return.

https://www.irs.gov/pub/irs-pdf/f8990.pdf

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Level 2

Does Turbotax support Form 8990? Have K-1 for ptp (mlp) reports Business Interest Exp box 13 code K. Partner instr say Form 8990 must be filed. Using Premier desktop.

As the answer above says, you’ll have to get the 8990 from the irs website and file by mail. Hopefully next year TurboTax will support it. It’s a new form this year.

There is definitely a reason for filing the 8990, especially if the code is 13k, excess business interest expense. Your basis is reduced by that amount, but you don’t get the deduction until a future year where the excess taxable income or excess taxable business interest income from that current year FROM THE SAME entity exceeds your excess business interest expense that has been carried forward. So ignore it, and you’ll be throwing money away. 

If the amounts in the K-1 Line 20 are AE or AF, excess taxable income or excess taxable business interest income, and you have less than $25 million in AGI plus any carryovers, you could probably get away with not filing the form this year.

The partnership you got the K-1 had the deduction limited, but it is passed on to the partner to carry forward.  The partnership doesn’t get to carry it forward. You are only limited on the deduction if you are subject to section 163(j) yourself. Otherwise you get the full deduction, in a later year.
New Member

Does Turbotax support Form 8990? Have K-1 for ptp (mlp) reports Business Interest Exp box 13 code K. Partner instr say Form 8990 must be filed. Using Premier desktop.

Form 8990 is supported and available in TurboTax Business.  See the following IRS Forms Availability Table for TurboTax Business

https://ttlc.intuit.com/replies/3319877

Returning Member

Does Turbotax support Form 8990? Have K-1 for ptp (mlp) reports Business Interest Exp box 13 code K. Partner instr say Form 8990 must be filed. Using Premier desktop.

This is a K-1 received on my personal tax return vs. an entity return.  How am I supposed to use TTax business to file F1040?