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Level 5
posted Mar 28, 2024 1:03:00 PM

How do I report investment interest expense from K-1 Box 13 Code H to Sch E page 2 instead of Sch A?

I have investment interest expense reported to me on a k-1.  My k-1 footnote includes the following language:  

1040 FILERS SHOULD ENTER THIS AMOUNT ON FORM 4952, LINE 1. ANY DEDUCTIBLE AMOUNT SHOULD THEN BE ENTERED ON SCHEDULE E, PART II, COLUMN (I).  TurboTax is not putting the deductible amount on Schedule E.  Instead, it is putting it on Schedule A as an itemized deduction.  How do I get TurboTax to properly record the income on Schedule E.?  The k-1 states that this is not a passive item and it also states that the k-1 was prepared for someone who does not materially participate.

 

0 9 5577
1 Best answer
Expert Alumni
Apr 11, 2024 1:54:21 PM

The amount from Form 1065 Schedule K-1 Box 13 Code H is used by the program in the calculation of Form 4952 (Investment Interest Expense Deduction). The amount is transferred to line 1 of Form 4952. The program will transfer the result to Schedule A.

 

You can report this instead on Schedule E page 2 using Forms Mode

  1. In the step-by-step interview, do not use Box 13 Code H. Instead, use Code ZZ
  2. Go to Forms and open K-1 Partner for this investment.
  3. Scroll down to Line 13 and click the QuickZoom button for codes R and W to ZZ.
  4. Scroll down on the Additional Information form to Line 7a and enter the amount.
  5. Open Form 4952, Schedule A, and Schedule E pg 2 to confirm the result as follows.

This entry will adjust the investment interest expense for Form 4952 / Schedule A and instead report the expense on Schedule E page 2 on Line 28 column (i) Nonpassive Income/Loss - Loss K-1.

 

@MAC18 

@scott523kim 

 

9 Replies
Level 15
Mar 28, 2024 8:02:14 PM

is the line 13ZZ.  turbotax has a major bug in that k-1s are not providing for subschedule entry when necessary. like for 13zz. if it's code 13H. Turbotax can not handle it

 

contact support

Level 5
Mar 29, 2024 1:39:16 PM

The investment interest expense is reported to me on box 13H.  How can I get TurboTax to put this on schedule E rather than schedule A?  There must be some way to manually adjust this.

New Member
Apr 8, 2024 10:50:21 PM

Were you able to fix this on TurboTax to make investment interest expense show up in Schedule E?

Level 5
Apr 9, 2024 6:14:46 AM

No, I have not been able to get TurboTax to put the investment interest expense on Schedule E.  I am considering a workaround where I re-enter the k-1 numbers but instead of entering the investment interest expense as a 13H item, I will enter it as a line 11, other income/(loss) item.  I will then describe the other income as Investment Interest Expense.  Hopefully this will get it to schedule E as its own line item with the proper description.  I have no idea if this will work but this is my current plan if nobody from the community can instruct me on how to get the investment interest expense to go to schedule E instead of schedule A.

Expert Alumni
Apr 11, 2024 1:54:21 PM

The amount from Form 1065 Schedule K-1 Box 13 Code H is used by the program in the calculation of Form 4952 (Investment Interest Expense Deduction). The amount is transferred to line 1 of Form 4952. The program will transfer the result to Schedule A.

 

You can report this instead on Schedule E page 2 using Forms Mode

  1. In the step-by-step interview, do not use Box 13 Code H. Instead, use Code ZZ
  2. Go to Forms and open K-1 Partner for this investment.
  3. Scroll down to Line 13 and click the QuickZoom button for codes R and W to ZZ.
  4. Scroll down on the Additional Information form to Line 7a and enter the amount.
  5. Open Form 4952, Schedule A, and Schedule E pg 2 to confirm the result as follows.

This entry will adjust the investment interest expense for Form 4952 / Schedule A and instead report the expense on Schedule E page 2 on Line 28 column (i) Nonpassive Income/Loss - Loss K-1.

 

@MAC18 

@scott523kim 

 

Level 2
Apr 11, 2024 8:28:48 PM

Thanks a lot @PatriciaV !
My situation was different, but at least I was able to see a way to correct it via Forms mode, namely QuickZoom button for codes R and W to ZZ.

Level 5
Apr 12, 2024 10:56:11 AM

Thank you PatriciaV.  If I enter the investment interest expense in box 13 ZZ instead of box 13 H, won't that remove the expense from form 4952?  Per the k-1, I am to enter the expense on form 4952 with the deductible amount flowing to schedule E.  In Forms mode, is there a way to manually enter the investment interest expense on form 4952?

Level 5
Apr 14, 2024 5:06:12 AM

This solution is perfect!  Thank you

Level 2
May 17, 2024 9:16:03 AM

Unfortunately, this fix does not work in TTO.