K1 question "why doesn't Pro Series.....

[donnaV]

Have a K1 that has rental RE income on line 2 $31000...on line 13 code K (excess interest deduction) is $6000 and in the little box on the bottom left is partners cap acc analysis that shows a NET income of $25K so I'm thinking shouldn't ProSeries show the NET on Schedule E?  rather than the line 2 amount in full?  don't they get a deduction? 

[Terry53029]

Here are the instructions for 1065 K1 line 13K. link to instructions. https://www.irs.gov/instructions/i1065sk1#en_US_2024_publink11396nd0e2460

The 8990 will tell you if your client can deduct any of the interest or carry it forward

Code K. Excess business interest expense (EBIE). 

If the partnership reports EBIE to the partner, the partner is required to file Form 8990. See the Instructions for Form 8990 for additional information.

For tax years beginning after 2017, the partner’s basis in its partnership interest at the end of the tax year is reduced (but not below zero) by the amount of excess business interest allocated to the partner for the tax year, even if the partner isn't allowed a deduction for the allocated excess business interest in the year of the basis reduction. If the partner disposes of a partnership interest in which the basis has been reduced before all of the allocated excess business interest was used, the partner increases its basis immediately before the sale for the amount not yet deducted.