I have a 1065 that is not subject to Sec. 163(j).  However, the excess business interest expense is disallowed and carried forward since they have no excess income.

The excess business interest expenses was recorded on the client's books.  Now, my book NI and tax NI do not tie.

How are you accounting for the difference since it carries forward?  Are you putting an AJE in the client's books to reconcile this, or are you using the M-1 to tie out?