@WaltPDX :
Many changes have been made due to covid and the CARES Act. having said that (and including as much as I can to assist via back and forth messaging), there should be a statement, either at the bottom of the K-1 or on a separate sheet, that contains the extra information you need to enter the Code AC detail.
- On the screen, Check Boxes That Have an Amount be sure to mark the box Box 17 Info and click Continue.
- On the screen, Enter the Box 17 Info, enter code AC and the dollar amount and click Continue.
- On the next screen, Enter Code AC Detail, enter the amounts for the categories listed and click Continue.
- On the next Enter Code AC Detail, enter the description and amount of categories not listed on the first screen and click Continue. These amounts will not automatically flow into your return.
- Instructions for entering the amounts in TurboTax appear on the next screen, How to Enter Code AC Information.
Code AC:
Gross receipts for section 448(c) Use the gross receipts amount to figure the business interest expense you can deduct, if applicable. See section 163(j) and the Instructions for Form 8990 for details.
Section 163(j):
Prior to the CARES Act, the business interest expense deduction was limited to the sum of the taxpayer’s business interest income, plus 30% of adjusted taxable income (ATI), plus floor plan financing interest expense. The CARES Act added several special rules, which should be taken into account for 2020 tax planning, including:
- The Act retroactively increased the section 163(j) limitation to 50% of ATI (up from 30%) for 2019 and 2020, for taxpayers other than partnerships. Taxpayers have the option of electing out of this rule and using 30% instead of 50%.
- For partnerships, the increase to 50% only applies for 2020. Partners allocated excess business interest expense (EBIE) from 2019 can deduct 50% of that amount as an interest deduction in their 2020 tax year, without limitation.
- The Act also allows taxpayers to elect to use their 2019 ATI to calculate the 2020 section 163(j) limitation. This election will be helpful for taxpayers experiencing losses in 2020 due to current economic conditions.
Form 8990 Instructions: IRS Form 8990 Instructions
