How do I report investment interest expense from K-1 Box 13 Code H to Sch E page 2 instead of Sch A?

Forum|Forum|2 years ago
March 28, 2024
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I have investment interest expense reported to me on a k-1. My k-1 footnote includes the following language:

1040 FILERS SHOULD ENTER THIS AMOUNT ON FORM 4952, LINE 1. ANY DEDUCTIBLE AMOUNT SHOULD THEN BE ENTERED ON SCHEDULE E, PART II, COLUMN (I). TurboTax is not putting the deductible amount on Schedule E. Instead, it is putting it on Schedule A as an itemized deduction. How do I get TurboTax to properly record the income on Schedule E.? The k-1 states that this is not a passive item and it also states that the k-1 was prepared for someone who does not materially participate.

Best answer by PatriciaV

Were you able to fix this on TurboTax to make investment interest expense show up in Schedule E?

The amount from Form 1065 Schedule K-1 Box 13 Code H is used by the program in the calculation of Form 4952 (Investment Interest Expense Deduction). The amount is transferred to line 1 of Form 4952. The program will transfer the result to Schedule A.

You can report this instead on Schedule E page 2 using Forms Mode.

In the step-by-step interview, do not use Box 13 Code H. Instead, use Code ZZ.
Go to Forms and open K-1 Partner for this investment.
Scroll down to Line 13 and click the QuickZoom button for codes R and W to ZZ.
Scroll down on the Additional Information form to Line 7a and enter the amount.
Open Form 4952, Schedule A, and Schedule E pg 2 to confirm the result as follows.

This entry will adjust the investment interest expense for Form 4952 / Schedule A and instead report the expense on Schedule E page 2 on Line 28 column (i) Nonpassive Income/Loss - Loss K-1.

@MAC18

@scott523kim

Mike9241

is the line 13ZZ. turbotax has a major bug in that k-1s are not providing for subschedule entry when necessary. like for 13zz. if it's code 13H. Turbotax can not handle it

contact support

MAC18Author

The investment interest expense is reported to me on box 13H. How can I get TurboTax to put this on schedule E rather than schedule A? There must be some way to manually adjust this.