Loan for partnership, interest deductible from distributions?

[KCD222]

I took a loan out to join a partnership (LLC,) My understanding is that i can offset interest paid on the loan verses earning distributions from the partnership. How do i properly do this?  I also have an attorney fee and an origination fee, on this loan. Can i deduct these with int the K1 section as well? 

[tagteam]

See https://www.irs.gov/taxtopics/tc505

and

https://www.irs.gov/publications/p550#en_US_2023_publink100010210

[Mike9241]

"join" a partnership. this could mean several things. 

see thess threads

https://accountants.intuit.com/community/proseries-tax-discussions/discussion/deduct-loan-interest-p... 

*

https://www.forbes.com/sites/peterjreilly/2019/09/03/irs-drubbed-in-tax-court-on-partnership-interes... 

the question is do you materially participate in the LLC. if so then it's not investment interest

Investment property.

Property held for investment includes property that produces interest, dividends, annuities, or royalties not derived in the ordinary course of a trade or business. It also includes property that produces gain or loss (not derived in the ordinary course of a trade or business) from the sale or trade of property producing these types of income or held for investment (other than an interest in a passive activity). Investment property also includes an interest in a trade or business activity in which you did not materially participate (other than a passive activity).

if it's not investment interest it gts deducted as UPE - Unreimbursed partnership expense. 

[tagteam]

Mike's right; the question is whether or not you materially participate in the partnership.