I borrowed money to invest in 2 entities: a LLC where I am a material participant and an LLC where I am passive. How do I report the interest expense in turbo tax?

[johwa_77]

To be clear, I have two separate entities and two separate loans.

[Anonymous]

see this article

https://www.investopedia.com/terms/i/investment-interest-expense.asp

[Rick19744]

I don't agree with @Anonymous based on your facts.

Borrowing $$ to fund an interest in a business activity, is deductible based on the tracing rules.

See the attached instructions to Schedule E and in particular page E-10 line 28; debt financed acquisition.  Here you borrowed $$ to acquire an interest in a business.

For the activity in which you materially participate, the interest expense will be reported on Schedule E on a separate line titled "Business Interest".

For the passive activity, the interest expense will be included in the passive activity amount reported on form 8582.

https://www.irs.gov/pub/irs-pdf/i1040se.pdf