TurboTax wants to attach Form 8990 because it thinks my business owns a pass-through entity with excessive interest expense.

[heinelg]

I'm trying to e-file an 1120 return for my small C-Corp. TurboTax says:

"Attachment Needed - Form 8990

Since you indicated the business owns a pass-through entity with excessive interest expense, you must attach Form 8990 when you e-file your tax return."

The problem is the business doesn't own a pass-through entity and I can't find where to correct this. Where is this question asked?

Thanks!

[monadz16 · Accepted solution]

Review the questions on your Schedule K and correct the answer to question #24 to "yes," if appropriate, which removes the need for the form 8990.

[heinelg]

Thank you! Even after I reread that question I was confused as to what was being asked.

[payanja]

I am also having the same issue. Were you able to get rid of form 8990?

[payanja]

I am also having the same issue. Were you able to get rid of form 8990?

[heinelg]

Yes, the answer is correct for a C Corp filing Form 1120. Schedule K is found on Form 1120, Page 4

[payanja]

Thanks for the response! Not sure if mine is different, I am filing S corp. Schedule K goes only to number 18.

[lwrosenfeld]

Same issue on my filing of a Form 1065 for LLC partnership. I cannot find a Schedule K only K-1s and there is no question like that on the K-1s. Can someone pleas let me know where to find it for Form 1065? Thanks

[xstevens]

I have same issue with Form 1120S. Any solution?

[xstevens]

For 1120S the fix is to answer Yes to Question 10 on Schedule B.

[lwrosenfeld]

Does anyone have the fix for Form 1065 can't find either Sch K or Sch B...

[bhkumar]

on form 1120 s question 10 should be Yes

[pirate1122]

1065 Solution I switched to the step by step . Started from the very beginning, When you get to the page with like 20 yes or no questions, there is a question about a pass through entity . It is probably marked yes. Mark it no, click next and it will ask you to fill out a 8990 form. Now press back, change the answer back to yes, and continue. I went through all the pages again to check for anything else but I didnt make anymore changes. When I got back to the end , it no longer requested the form.

[Smarc]

That answer is only if you are preparing a 1065 partnership return, or an 1120s return. If you are getting the prompt while doing your personal taxes it is triggered by your K-1’s.  If have Line 13, Code K on the K-1, Excess business interest expense, you are required to file form 8990.  You want to do that.  That excess business interest expense reduces your tax basis, but is not deductible in the current year, it is carried forward by you, not the partnership, until a future year where there is excess taxable income (Line 20 Code AE) or excess business interest income (Line 20 Code AF) in that year FROM THE SAME entity.  Those two amounts, Code AE and Code AF do not carry forward year to year, but are used to calculate that you are not subject to any further section 163(j) limitations. (Basically make less than $25 million including those AE and AF amounts, and/or don’t own a foreign entity.

I’ll add the caveat that I’m not a CPA, I’ve read everything I can find on the 8990, including the tax code.