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Level 1
posted Jun 4, 2019 1:22:03 PM

How do I enter interest income from peer-to-peer lending

I have interest income from peer-to-peer lending.  This generates income that can be considered PASSIVE INCOME.  I also have a K-1 showing PASSIVE LOSSES that exceed this Passive Income.  But TurboTax doesn't seem to automatically offset the Passive Income from PeerStreet, which generated a 1099-INT and 1099-OID as an item be offset by my K-1 Passive Loss.  How can I fix this?

0 1 1930
1 Replies
Alumni
Jun 4, 2019 1:22:04 PM

Generally, interest income is considered portfolio income, not passive.  Interest reported on 1099-INT and 1099-OID would definitely be considered portfolio income...and not allowed to offset passive activity losses.

Also, the interest income that might be shown on the K-1 as a separately stated item, will more than likely be treated as portfolio income as well.

While in the common vernacular, interest income from lending might seem to be passive, for Federal Income Tax purposes, it is considered portfolio income.  See Pub 925 for more information regarding passive/non-passive/portfolio


https://www.irs.gov/pub/irs-pdf/p925.pdf