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Business & farm
I don't agree with @Anonymous based on your facts.
Borrowing $$ to fund an interest in a business activity, is deductible based on the tracing rules.
See the attached instructions to Schedule E and in particular page E-10 line 28; debt financed acquisition. Here you borrowed $$ to acquire an interest in a business.
For the activity in which you materially participate, the interest expense will be reported on Schedule E on a separate line titled "Business Interest".
For the passive activity, the interest expense will be included in the passive activity amount reported on form 8582.
https://www.irs.gov/pub/irs-pdf/i1040se.pdf
*A reminder that posts in a forum such as this do not constitute tax advice.
Also keep in mind the date of replies, as tax law changes.
Also keep in mind the date of replies, as tax law changes.
‎June 7, 2020
3:33 PM