the interest expense limitation might exist if there is a number on 13k of part III of the k-1. if you have such a number run to a tax pro because Turbotax can not handle the situation
Subject: Re: K-1 Footnote: Section 163(J) Interest Expense Limitation
I can't fully answer your 163(j) question because you have to go back to 2018. 163(j) went into effect in 2018 and reflects limitations on the deduction of excess business interest expense (EBIE). if there is any it would be on line 13K for 2018 through 2021. you should have received footnotes about the limitation for all years after 2017. if 13K is zero for all those years just ignore the whole subject.
excerpt from IRC 163(j)
(3)Exemption for certain small businesses
In the case of any taxpayer (translation the partner) which meets the gross receipts test of section 448(c) (translation, if your share of the average gross receipts of the partnership for the prior 3 years is less than $25,000,000) paragraph (1) (translation, the limitation on the deduction of business interest shall not apply) to such taxpayer for such taxable year. you are deemed a small business taxpayer
you are not subject to the limitation but you are required to file form 8990 which TurboTax does not do the form. if there is an amount on line 13K or if you reported EBIE in any year 2018-2020 if there is a carryover. you need to file 8990.
from 8990 instructions
Exclusions from filing. A taxpayer is not required to file Form 8990 if the taxpayer is a small business taxpayer and does not
have excess business interest expense from a partnership. so if there's an amount on 13k you are required to file even though you are not limited
why is this important
if subject to the limitation and reported/calculated properly from 2018-2020 your share of taxable income was increased or your share of tax loss was decreased by the EBIE - see prior year's forms 8990. however, your tax basis was reduced by the non-deductible EBIE. To the extent, there is unused EBIE in 2021 that increases your basis for determining gain or loss on disposition. Turbotax does none of these calculations.
