Enter the information for Form 1120S Schedule K-1 Box 17 Code N as it appears, including the amount of interest due. On the next screen, TurboTax will provide generic instructions on how to enter Code N, which is essentially following whatever guidance is provided with your K-1.
The IRS Instructions for Form 1120S Schedule K-1 Box 17 Code N say to report this interest on Schedule 2 (Form 1040) Line 15. Search for "Other Taxes" and enter the deferred interest for Section 453A(c), if applicable.
In TurboTax, you will need to report this as an Installment sale, using the info provided by the S-Corp. Be sure you indicate this was used in a business and link it to the S-Corp K-1. This will generate Form 6252. You may need to access Form 6252 using Forms Mode to answer additional questions not included in the interview.
However, you may need the assistance of the company that sent the K-1 to enter this properly so that the deferred interest carries over to Schedule 2. This public forum is not the best resource in this case. You might also consider using TurboTax Live, which allows a tax expert to work with you on these entries.
[edited 3/20/2025 | 2:46 pm PDT]
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