Generally, interest income is considered portfolio income, not passive. Interest reported on 1099-INT and 1099-OID would definitely be considered portfolio income...and not allowed to offset passive activity losses.
Also, the interest income that might be shown on the K-1 as a separately stated item, will more than likely be treated as portfolio income as well.
While in the common vernacular, interest income from lending might seem to be passive, for Federal Income Tax purposes, it is considered portfolio income. See Pub 925 for more information regarding passive/non-passive/portfolio
https://www.irs.gov/pub/irs-pdf/p925.pdf
**Disclaimer: Effort has been made to offer correct information; but due to the discussion forum limitations, the poster disclaims any legal responsibility for the accuracy of the poster's response**
