Interest on Debt Financed Distribution

[DaninAuburn]

Hello.  I am preparing a 1065 for a partnership I am in.  In 2019 we refinanced a mortgage and pulled money out of a real estate investment.  This causes a portion of the interest expense on the new loan to be interest on debt financed distributions and is reported separately to the partners.  A CPA friend said it should go on each partners K-1 on line 13 with a code of W.  However, my balance sheet is off by this amount and it appears to be from the referenced interest no impacting the capital accounts.

Where do I input the interest on debt financed distribution in the return? 

Thanks.

[Anonymous_ · Accepted solution]

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@DaninAuburn wrote:

Where do I input the interest on debt financed distribution in the return? 

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Use Forms Mode and open your 1065, page 4-5.

Enter the figure in Schedule K in the Deductions section (just underneath Line 13O there is a dropdown - select Code W, enter a description and amount).

[DaninAuburn]

Bingo!  Thank you!

Dan