markblaze
New Member

How is qualified business income calculated when a loan is taken out (and interest is paid) to purchase a share in a partnership?

For example, suppose I earn $10,000 from a partnership in 2020.  Also suppose I had to take out a loan and paid $5,000 in interest in 2020 to purchase the share of the partnership.  Form 8995 seems to deduct the $5,000 interest to calculate my qualified business income if I enter the interest as a separate line on Schedule E.  But Form 8995 seems to not deduct the $5,000 interest to calculate my qualified business income if I put the $5,000 interest in with other UPE (unreimbursed partnership expenses).  Which way is correct?