Welcome Guest. Register Now!  

LinkBack Thread Tools Search this Thread Display Modes
  #1 (permalink)  
Old 02-05-2014, 08:39 PM
Junior Member
Join Date: Feb 2014
Posts: 2
Business note interest income

I am an active (not material) member of an LLC that holds a mortgage loan on some property that I and the other member sold. The LLC incurs expenses each year such as annual report fees etc. but I have been unable to find from searching the tax laws if my share of these expenses are deductable once they pass thru to my personal tax return.

They do show up on the K-1 that Turbo Tax does for the LLC, in box 1 "ordinary income/loss". The thing is the only income the LLC receives is interest it takes in on the mortgaqe note. (there were no capital gains since it was a zero basis when we sold the property). This interest income is passive.

When doing my personal return I enter the data from the K-1 and Turbo Tax asks me if the loss (expenses) were at-risk (which I would think they were), since they were paid by the LLC . And it asks me if I was an active member in decisions etc, which I was.

And after doing so, when I view Form 8582 page 1 it does show the net income/loss from the LLC on lines 3a thru 3d, and is reflected on line 4. The form 6198 also shows losses which are reflected on box 1 of the K-1.

But then also on Form 8582 on page 2 worksheet 5, it shows what appears to be an "unallowed loss" of said losses. So I guess this particular scenario for an LLC the expenses are not deductable when passed thru to my personal return. I'm still curious as to why since I can't clearly nail it down.

From another LLC of similar member status but with rental income (passive also) the same form shows that expenses were allowed to deducted against my personal returns income.
R_W_B Posts: 3Joined: 6 Jan 2012

Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!Reddit! stumble!bookmark in google!Share on Facebook!
Reply With Quote

Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

vB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off

Similar Threads
Thread Thread Starter Forum Replies Last Post
How To Calculate Interest For Shareholder -note Payable ndsheetmetal S-Corporation 3 01-31-2014 03:21 PM
note receivable gift rdockins Capital Gains 1 02-22-2011 05:05 AM
Note Receivable Casco Income 0 01-29-2009 03:58 PM
Accrued interest on shareholder note to C-Corporation luke1290 C-Corporation 1 01-26-2009 10:35 AM
Can I write off interest expenses on my personal loan used for my Business? JimiGood Sole-Proprietorship 1 03-04-2008 10:34 AM

Follow us on Facebook Follow us on Twitter Google Buzz Rss Feeds

» Categories
 » Income
 » IRA/Sep
 » Medical
 » Payroll
Forum for CPAs
Financial Planning