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Partnership pays interest for personal equity loan

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    Partnership pays interest for personal equity loan

    I need help to think this through for the tax consequences.

    Partner A owns 98%, Partner B 2%. They built an apartment complex they will permanently financed now and the personal equity loan for A will be paid off with the permanent financing. A want to personally reimburse B 2% of the allocated interest expenses each month to make up for this personal loan pay off. This will take care of the cash flow. Then B has this amount more as a deduction on his K-1, and here my brain gets confused. It appears to be double dipping now saving taxes on the 2%?
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