K1 Loan interest deduction

Forum|Forum|6 years ago
March 12, 2020
2 replies
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I am trying to figure out the best place to enter interest expense on a K1 for my 2019 return.

I financed a buy-in to the corporation and received a statement of interest paid on that loan. Where would be the best place to put this information?

My understanding is that it should end up on Schedule E, but when entered on the K1, it ends up on my Schedule A.

thanks in advance.

TurboTax Home & Biz Windows

DianeC958

Level 12

TurboTax is taking the deduction correctly. Since you financed your purchase into the corporation the deduction for the interest does belong on Schedule A not your K-1.

The interest you pay on the loan is a personal expense not a business expense.

What are Deductible Investment Interest Expenses?

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newtond3Author

Level 2

Should that be listed on form 4952 (investment interest expense deduction) and line 9 or under "other" line 16?

thank you for the clarification!

oasisus888

Level 2

This is a great thread! I am having exactly the same question but after searching the internet I only found this one answering me, kind of.

I have a question though. How did you enter your interest as cost with the TurboTax? While entering your K-1's or somewhere else?

Thanks a million!

ThomasM125

Level 15

I believe you are referring to interest on a loan you took out to purchase stock in a corporation. If so, that would be investment interest expense. It would be entered in the Deductions and Credits area of TurboTax, then Retirement and Investments, then Investment Interest Expense. It is an itemized deduction and as such will only benefit you if you can benefit from itemizing your deductions. @oasisus888

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