How do I enter 1099-Int interest as Passive Interest. This interest was earned from Peer to Peer Lending.

[ggold91364]

I have 1099-Int income that is Passive Income (from a Peer-to-Peer lending investment.  I also have Passive Losses in my K-1 from a different investment.  How do I enter the Passive Interest income so it will get offset by the Passive Losses?

[MinhT · Accepted solution]

Interest is considered by the IRS as nonpassive income and cannot be used to offset passive losses.

Please read this IRS document:

https://www.irs.gov/businesses/small-businesses-self-employed/passive-activity-losses-real-estate-ta...