Partnership

[Bird Legs]

in 2004, my client borrowed $50,000. to put into a partnership. 50% owner. Client is a general partner and active in partnership. The Partnership had a profit for the year and client will pay S E tax on his share.
Question: The interest that my client pays on the $50,000. that he borrows, is it deducted on page 2 of the Sched. E as a reduction of the profits of the partnership, or is it considered to be investment interest?
The favorable treatment, of course, would be on Sched. E as a reduction of the earnings
reported.
Thanks, tweet...

[Bees Knees]

Interest paid to acquire partnership

Schedule E instructions for Part II, under Partnerships, says you deduct interest expense paid from debt-financed acquisitions in Part II, or Schedule A depending on the type of expenditure to which the interest is allocated.

[Bird Legs]

Interest paid to acquire partnership interest

in which you are a general partner is deductible on Sched. E page 2.
Bees, appreciate this info.
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