A trader fund generally treats fund expenses, such as management and professional fees, as ordinary business deductions under section 162. In contrast, an investor fund generally treats these expenses as miscellaneous itemized deductions under section 212.
i am also confused by this phrase "most of the income/expense for this year is due to carried interest allocated to me by the GP".
as I understand the term that's a specific allocation to the GP as a performance fee for achieving a minimum return as specified in the partnership agreement, so why it would be allocated to you is unknown.
so this is my opinion but others might differ on this
as a limited partner you would be treated as an investor regardless of the fact that you are a trader.
if they were meant to be business expenses under IRC 162, I would think they would have been included on line 1 of part III rather than 13W. in TurboTax as you are going thru the interview process you need to check of box 13. then you'll come to a screen that says "enter box 13 info" with dropdown boxes. this is where you select w and enter the total. then continue. then you come to another screen that says "enter code W detail"
you'll have to check off the boxes that apply. I can't tell you which. "Other misc deductions" refers to the old 2% of AGI deductions which are no longer deductible for federal purposes. if you use "I have another description" Turbotax requires them to be entered here and re-entered on whatever form they should be reported on.
I would suggest contacting the GP to see if they'll provide more guidance. Some partnerships include a supplemental statement or schedule about how to treat certain line items.
