I purchased an additional 10% of our LLC (taxed as
Partnership) from a partner as of 1/1/15. She and I signed a note payable and I have
been making payments which included Interest. What I can’t find good
information on is if I can deduct the interest against my LLC income on
Schedule E Part II or if it has to go to schedule A.
Of the purchase 98% has been allocated to Goodwill and is
being amortized as a 754 election and the other piece was a capital purchase of
essentially the cash and office furniture.
All income from the LLC is self-employment income so there
is no investment income to offset on schedule A which makes that deduction
meaningless. There is a much greater benefit to it being on Schedule E, but I
don’t want to do anything incorrectly. Do you know what the regulations are
about this?
