huskies 2014: Thanks for your original question and your follow up. It appears that the new treatment of investment interest expense by businesses is what is causing our problem.

This is how I resolved it for my firm: on the 1120S; input sheet #33; Other Information; Gross Receipts for Sec. 448(c) (AC) line, I entered a "-1".

That removed the 17AC code from my K-1. Now I'm happy. : )