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PDtax, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 4512
Experience:  35 years tax experience, including four years at a Big 4 firm.
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I have a K-1 from an active partnership. I am a passive

Customer Question

Hello. I have a K-1 from an active partnership. I am a passive partner. I have passive losses carried over from prior years from the partnership. For 2014 partnership has losses on Box 1, but interest income on line 5. Can this interest income be offset with the passive losses from prior years?
Submitted: 1 year ago.
Category: Tax
Expert:  PDtax replied 1 year ago.

Hi from just answer. I'm PDtax, and will assist.

Expert:  PDtax replied 1 year ago.

Your interest income from the partnership is portfolio income, and can not be offset by prior or current year passive losses from the same partnership. Only passive income qualifies. IRC 469 (e) (1).

This is a common area for IRS scrutiny. They actively guide their auditors to look for this issue.

Thanks for asking at just answer. Positive feedback is appreciated. I'm PDtax.