Interest on Debt Financed Distribution

Forum|Forum|6 years ago
February 28, 2020
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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.

TurboTax Business Windows

Best answer by Anonymous_

@DaninAuburn wrote:
Where do I input the interest on debt financed distribution in the return?

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).

Anonymous_Answer

Level 15

@DaninAuburn wrote:
Where do I input the interest on debt financed distribution in the return?

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).