Well it's against my better judgement. But since you are musically inclined. Here is the question I asked followed by their answer. Hope it helps.
Your question was: T/P is a partner in a partnership that distributed rental real estate income (line 2 of Schedule K-1 $20,658) for 2019. In the footnotes of the K-1, the following is written- The company qualifies for the small business exception to Section 163(j) and the company is not subject to the section 163(j) limitation on business interest. Your share of information relevant to your section 163(j) calculation is: Gross Receipts of the company $27,585 Adjusted Taxable Income $28,381 Gross Business Interest Income 0 Gross Business Interest Expense $2,254 Some of my research led me to the belief that I need to fill out form 8990 (Limitation on Business Interest Expense Under Section 163(j). However, my tax software (Proseries) does not support that form. I therefore thought it belonged on form 4952. Can you please clarify it's treatment. Thank you
Answer: If the partner is not subject to 163(j) and the partnership was not either, then Form 8990 is not required. To determine if the partner is I used the definition on Page 1 of the Form 8990 instructions for a small business taxpayer (i.e., one that averages $26 million or less in the prior three years) and on Page 4 at the bottom of the right-hand column that says if you are subject to Sec. 163(j) and the partnership is not. Since the partner is not, then Form 8990 is not needed. Here is the link to the instructions, https://www.irs.gov/pub/irs-pdf/i8990.pdf Investment interest expense is not subject to Sec. 163(j) so investment interest of the partnership would be reported on line 20b of Schedule K and on line 20, code B, of Schedule K-1. If the partnership had not been able to deduct all of the business interest (which would be reflected in Box 1 of the Schedule K-1) then to the extent that the partnership has excess business interest expense, it is reported to each partner on Schedule K-1, line 13 (other deductions), code K. Excess taxable income, if any, is reported on Schedule K-1, line 20 (other information), code AE. Any excess business interest income is reported on Schedule K-1, line 20, code AF. Therefore, it is already deducted from Box 1 of the Schedule K-1 and would not be deductible again. I have details attached to this email
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