Interest expense

Forum|Forum|5 years ago
February 23, 2021
1 reply
19 views

I have a client that has a note he is still paying for an interest as a general partner as an insurance broker. The business is gone and he is now an employee of a new company. Any ideas on how I can deduct the interest he is still paying? Investment interest is the only thing I can think of, even though it was business interest originally.

Lacerte Tax

This topic has been closed for replies.

qbteachmt

Level 15

"he is still paying for an interest as a general partner as an insurance broker."

"even though it was business interest originally"

An interest in the Entity? Or, the "book" of the business? Who is carrying the loan note: a bank or a partner or?

Don't yell at us; we're volunteers

M

Max WAuthor

Level 2

My client bought into an existing insurance partnership which subsequently was bought out by a large firm. But my client still has about a half million dollar loan with the person he purchased the interest in the partnership from. My client was an active general partner and now is an employee of the corporation that acquired the partnership.

qbteachmt

Level 15

This business interest debt wasn't paid off, or some sort of partner pay out wasn't done, or the inclusion to satisfy this debt wasn't negotiated at the time the original entity was purchased by the corporation? Or, there was buyout consideration and this person just didn't use it to pay off this debt?

Don't yell at us; we're volunteers

Sign up

Login with SSO

Let's get you signed in

Login with SSO