The amount on Form 4952 Line 1 comes from:
- Schedule K-1 Partnerships Worksheet Line 13 Code H and/or
- Schedule K-1 S Corporations Worksheet Line 12 Code H and/or
- Schedule K-1 Partnerships Worksheet Line 13 Code ZZ where the Additional Information Worksheet Line 13 reports the amount on Line 7 as investment interest expense to be reported on Schedule E, page 2.
Line 5 is the total of investment expenses other than interest. These expenses reduce the investment income available for the investment interest deduction.
Your total deduction on Line 8 is limited to the smaller of Line 3 (investment interest expense) or Line 6 (net investment income). In other words, if you have more income than expense, you may deduct your total expense.
You can see the underlying calculations on the Form 4952 Worksheet (Wks) using Forms Mode (F6 or Forms>>>Open Form...).
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