Ok just confusing. Here is the Turbo Tax Question: Does not own a pass-through entity with carryover excess business interest expense. File K-1 pass-through to personal

[martinezbm]

Have a partnership with pass-through via K-1 to personal. I do not believe there is any carryover interest expense, but there is other carryovers. So do I answer Yes or No to that question?

[CherylW · Accepted solution]

Investment interest expense if treated differently than other expenses.

If you have no excess business interest expense, answer Yes (you do NOT own a pass-through entity with carryover excess business interest expense).

[Smarc]

I agree with what you are saying, but would clarify that this would show up on the K-1 as Line 13 Code K, Excess Business Interest Expense.  

[Smarc]

If what you are saying is you are doing your Partnership 1065 return, and answering question 24 then the answer is:  If you don't have any K-1s that your partnership received that had Line 13 Code K, or Line 20 AE or AF, and don't fit any of the other 163(j) criteria, answer YES.  The question is written as a negative, and if you answer NO, your return will try to generate Form 8990. 

If you are doing your personal 1040 return, and are reading the questions to see if you need to file a Form 8990, or if you are subject to the limits of Section 163(j), then the questions is did you RECEIVE a K-1 from a Partnership that you are a member of, that has an entry in Line 13 Code K, Excess Business Interest Expense? If you had a K-1, but it doesn't have that Code, you don't need a Form 8990, unless one of the other Section 163(j) limitations apply to your personal 1040 situation.  You CAN   File an 8990 If you had Line 20 AE Excess Taxable Income, or Line 20 Code AF Excess Business Interest Income that is used to determine if YOUR return is subject to further limitations of Section 163(j).  If you're a regular taxpayer making less than $25 million from all your sources, your likely not subject to the limitations, but check all the conditions to be sure.