charleskellett
Level 2
‎07-10-2020 02:05 PM

My client's K-1 has ordinary income and on line 13 he has business interest. If he and the partnership are not subject to limitation, 1.how to report the interest expense, and 2. Line 20 reports only the ordinary income for QBI income. Should this be reduced by the interest amount? 

0 Cheers
Dave9
Employee
Employee
‎07-10-2020 02:39 PM

In Lacerte, enter business interest expense in Screen 20.1, Other Deductions, and select "K - Excess business interest expense" with an amount.  The amount prints on Form 8990, page 3, Line 43, Column (c) . You will also need to enter the partners portion of "(20AE) Excess taxable income" and "(20AF) business income expenses" in screen 20.1. If the "business interest expense" is not limited on Form 8990, page 3, it will automatically reduce Ordinary Income from that K-1.