topic Interest income from seller carry back mortgage in an LLC in Investors & landlords

Interest income from seller carry back mortgage in an LLC

SJM — Sat, 11 Jan 2020 17:53:29 GMT

I have an LLC with income from two residential rental properties. A third property was sold two years ago and we have a carry back mortgage from that sale with interest only payments. Is the interest income reported under Interest Income from Investments or Other Income?

Re: Interest income from seller carry back mortgage in an LLC

Anonymous_ — Sat, 11 Jan 2020 18:24:44 GMT

It is reported as interest income, but enter it in the section shown in the screenshot below.

Re: Interest income from seller carry back mortgage in an LLC

SJM — Tue, 14 Jan 2020 23:40:06 GMT

The reply noted below is not an option as the interest income reported on Schedule K-1 automatically carries through to "Interest on 1099-INT" on Form 1040 which is the reason for my question as to how it should be entered on the Form 1065. The seller carry back financing is held in the Limited Liability Partnership.

Re: Interest income from seller carry back mortgage in an LLC

Anonymous_ — Wed, 15 Jan 2020 01:43:02 GMT

@SJM wrote:

.....the reason for my question as to how it should be entered on the Form 1065.

In that case, simply enter the interest under Investment Income in the program (specifically click the Start button to the right of Interest and dividend income and then enter the total in the box on the following screen).

The interest should wind up on Schedule K, Line 5 of Form 1065 and flow through to Line 5 of the partners' K-1s.

Re: Interest income from seller carry back mortgage in an LLC

SJM — Wed, 15 Jan 2020 05:28:39 GMT

Okay, that is what I have done. Thank you for the confirmation.