K-1 item

[DTS]

I have a K-1 from a trust that has code W in box 13. Detail sheet says "Interest allocated to debt-financed distributions" and is quite a sum.

Can anyone tell me how to acct for this correctly?

http://www.allbusiness.com/legal/laws-government-regulations/588553-1.html

Here is a link I found, but as far as I can read, no answer to my question that I can see.

Thank you for any help.

D

[fliszt]

Dennis, I believe

those dollars are contributions to some type retirement account. IRA, 401, SEP, etc. which is what my software says for that code and that box.
Larry

[DTS]

Larry

I'm thinking this is an interest due on a loan the partnership took out and this is the allocation of that interest. Check the link I posted and see what you think.

Code W is a catch-all letter and we have to find out how to treat it. Good luck to us, eh?

D

[geekgirldany]

take a look at tax almanac

http://www.taxalmanac.org/index.php/2005_Schedule_K-1(Form_1065)_-_Line_13_-_Other_Deductions_-_Code_Definition

Interest expenses allocated to debt-financed distributions. The manner in which you report such interest expense depends upon the taxpayer’s use of the distributed debt proceeds. If the proceeds were used in a trade or business activity, report the interest on line 28 of (schedule E). In column (a) enter the name of the partnership and enter “interest expense”. If you materially participated in the trade or business activity, enter the amount of the interest expense in column (h). If you did not materially participate in the activity, follow the instructions for (Form 8582) to determine the amount of interest expense the taxpayer can report in column (f). If the proceeds were used in an investment activity, enter the interest on (Form 4952). If the proceeds are used for personal purposes, the interest is generally not deductible.

[DTS]

Well Dany,

you did real good!!

Thank you so much.

D

[geekgirldany]

glad to help. It is from 2005 it appears but I believe the information is still correct on the coding.