Form 1040 K-1 line 13 code K excess business interest expense

[gabjo00]

Hello,

My client received a K-1 with excess business interest expense (line 13 code K).  I understand this is not provided for in the program.  I am confused what I should be doing with this.  Should I complete form 8990 and if so, am I able to deduct the excess business interest expense.  I also realize that that previous 3 years had a number on this line, but it did not flow anywhere on the 1040.  This partnership is now sold and the partner (my client) said she was told she can have offsets to her income from the k-1.  Box 1 has a very small loss, so I am unsure.  Any guidance?

[TaxGuyBill]

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@gabjo00 wrote:

  I am confused what I should be doing with this. 

This partnership is now sold and the partner (my client) said she was told she can have offsets to her income from the k-1.

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I had to deal with this yet, but according to the 1065 Instructions:

If the partnership reports EBIE, the partner is required to file Form 8990. The partner will enter the amount on Form 8990, Schedule A, line 43, column (c). See the Instructions for Form 8990 for additional information.

If it was a Passive Activity, any carryover losses on 8582 can be used this year because it was sold.  There could be other carryovers too, including a possible Excess Business Loss carryover.

[gabjo00]

Hi TaxGuyBill,

I am also new to dealing with this and I was reading through the instructions for 8990 yesterday.  I felt like I was reading through my daughters medical school journals. LOL Maybe I am over complicating it too. 

I wonder if there are any how to videos posted online (I tried searching) or if anyone has had experience on this form.