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charleskellett
Level 2
July 10, 2020

QBI and Business interest

  • July 10, 2020
  • 1 reply
  • 6 views

My client's K-1 has ordinary income and on line 13 he has business interest. If he and the partnership are not subject to limitation, 1.how to report the interest expense, and 2. Line 20 reports only the ordinary income for QBI income. Should this be reduced by the interest amount? 

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    1 reply

    D
    Dave9
    Level 2
    July 10, 2020

    In Lacerte, enter business interest expense in Screen 20.1, Other Deductions, and select "K - Excess business interest expense" with an amount.  The amount prints on Form 8990, page 3, Line 43, Column (c) . You will also need to enter the partners portion of "(20AE) Excess taxable income" and "(20AF) business income expenses" in screen 20.1. If the "business interest expense" is not limited on Form 8990, page 3, it will automatically reduce Ordinary Income from that K-1. 

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