Interest Expense Input Question - Debt-Financed Passive Investment

Forum|Forum|4 years ago
July 5, 2022
1 reply
7 views

Client borrowed money to invest in an LLC (rental property with a triple net lease). Client is a real estate professional, but does not materially participate in this activity and so the interest on the borrowed funds should be treated as a passive item and reported on Form 8582 (and then Sched Ep2).

How do I enter the interest in Lacerte? Is there somewhere specific, similar to UPE entries? Do I just use a second K-1 input screen? Something else?

Thank you!

Lacerte Tax

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Best answer by PhoebeRoberts

I personally enter it as a Separately Stated Income and Deduction, under one of the two Passive Items. Don't forget to manually adjust basis to take into account the interest paid with outside funds.

PhoebeRoberts

Answer

Intuit Community Champion

I personally enter it as a Separately Stated Income and Deduction, under one of the two Passive Items. Don't forget to manually adjust basis to take into account the interest paid with outside funds.

T

TaxGirl3Author

Level 5

Thank you, that makes a lot of sense!

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