Form 8582 vs Form 8990 in regard to Schedule K-1 for a Publicly Traded Partnership

Forum|Forum|1 year ago
March 25, 2025
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I have a Publicly Traded Partnership , Energy Transfer LP, with a K-1.

What is the difference Between Form 8582 and Form 8990?

Why would an accountant use Form 8582 instead of Form 8990?

Why would an accountant also use Schedule E?

My K-1 Box 13 K, Excess Interest Business Expense, is $2.

Thank you.

ThomasM125

Form 8990 is used to calculate the amount of interest expense deduction allowable in the current year as it can be limited by the amount of income of a business. Form 8582 is used to determine the amount of passive losses allowable to be deducted in the current year. They are two unrelated deductions so you wouldn't use one form in place of another.

Schedule E is used on your personal return to report rental income and also income/loss as reported on K-1 schedules from partnerships, S corporations and Trusts.

Your excess business interest is the amount not deductible in the current year as per the limitation calculated on Form 8990 mentioned earlier.

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Ciao4Author

Thanks for the great explanations.

Do you have to fill out Form 8990?

Can I choose not to take the deduction? From my K-1My EBIE, Box 13 K, is $2.

Is Form 8990 for Individual Tax Payers or for the actual partnerships?

On my K-1 Box 1, Ordinary business income (loss) is negative $5.

Does that amount flow into Form 8582?

Mike9241

a loss on the K-1 of a PTP never flows to form 8582. That's because the loss from a PTP, while passive, can only be offset by income from the same PTP and not other passive income. Any suspended loss is released upon total disposition.

The 8990 is a real headache because Turbotax does not support it.

In TurboTax for a PTP, it's necessary to check the "PTP" box as on the K-1. If that's not done, then it doesn't get the proper tax treatment. There should be no loss from a PTP showing on Schedule E unless it was disposed of in a taxable transaction. Schedule E page 2 is used to report certain income and allowable losses from Partnerships, S-Corps, and Trusts.

If you disposed of the PTP then what's reported on the 1099-B is wrong. The broker never knows and thus never adjusts for the activity. It is necessary to use the sales schedule that would accompany the K-1. There is also a K-3 that may affect your reporting, but that might not be out until after 4/15.

After reviewing the postings in this forum, if you don't think your accountant properly reported the PTP activity check with another tax pro