Business interest expense (line 13K) is different than interest on debt-financed distributions 13AC.
here are the rules taken straight from the k-1 instructions
Code AC. Interest expense allocated to debt-financed
distributions. The manner in which you report such
interest expense depends on your use of the distributed
debt proceeds. If the proceeds were used in a trade or
business activity, report the interest on Schedule E (Form
1040), line 28. In column (a), enter the name of the
partnership and “interest expense.” If you materially
participated in the trade or business activity, enter the
interest expense in column (i). If you didn't materially
participate in the activity, follow the Instructions for Form
8582 to figure the interest expense you can report in
column (g). See the definition of material participation,
earlier. If the proceeds were used in an investment activity,
report the interest on Form 4952. If the proceeds are used
for personal purposes, the interest is generally not
deductible.
https://www.irs.gov/pub/irs-pdf/i1065sk1.pdf
