I believe you are correct in that you need to handle this scenario entirely in Forms Mode as TurboTax does not support self-charged interest income/expenses.
Passive Activity Self-Charged Interest Income/Expenses: The program does not support
reporting self- charged interest income or expense related to a passive activity as either passive
activity gross income or passive activity deduction. See the IRS Instructions for Schedule K-1 for
more information.
See https://digitalasset.intuit.com/DOCUMENT/A6QrdFCgW/010421-2020-unsupported-calcs-L1FQfTTgn.pdf
