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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?
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‎October 4, 2021
7:31 PM