Business & farm

Florida-Rob · ‎March 20, 2025

Would you PLEASE provide a 8990 example:

on my Energy Transfer ET K1, i have say $798 in box 13K (Excess Business Interest Expense)

on 8990, i put this in 43C ? and $0 in 43D (as no prior carryforward)

43e is easy, its c+d

43f (current year excess taxable income) is easy, thats line 20AE (Excess Taxable Income)

so what is entered in 43g ? "(g) Current year excess business interest income" ? I think its 20AF - so if this is missing, then its 0 zero ?

43h is lesser of e OR f+g, so since f&g are zero, then we use zero

43i = e-h, = $798 carryforward

correct?

i see an example HERE, but not clear.

Q.) should 8990 Row 30 list the $798 ? (Total current year business interest expense deduction. See instructions)..

"A taxpayer subject to the section 163(j) limitation will enter on line 30 the smaller of line 29 or line 5"

so ROW 30 = $0

Q. So where do we show the $798 ? just on the 8990 Schedule A ? nowhere else ?

So we cannot use the $798 on this years return and must carry forward to next year (SEE below)

Found this from HERE:

Perhaps the most complicated aspect of the new law is what happens to the BIE once it is limited. Defined as excess business interest expense (EBIE), the amount becomes nondeductible in the current year and is carried forward to future years. It can only be deducted if, in a future year, the same activity that generated the EBIE in the first place now generates EBII or EBTI. The only way ...to eventually receive a tax benefit and deduct the EBIE will be if X itself generates EBII or EBTI in [future years] and reports it on A’s K-1.

SO I cannot use this $798 till next year.

but still more work, from HERE::

"Despite EBIE being currently nondeductible, A is still required to reduce her basis in X to the extent of her allocation of current year EBIE. Even though it is a carryforward and potentially deductible in the future, basis is reduced immediately. That may lead to basis limitations in other areas, such as the inability to take future losses because of at-risk limitations, or the recognition of gain on a distribution in excess of basis. To the extent that the taxpayer disposes of the investment before getting a tax benefit for the carryforward, the carryforward disappears and is added back to the basis of the investment for purposes of calculating gain or loss on disposition."

so reduction in BASIS is on the K1 'sales worksheet'