TaxGirl3
Level 5
09-24-2023
10:06 AM
- Mark as New
- Bookmark
- Subscribe
- Permalink
- Report Inappropriate Content
When contributed as additional capital, interest is likely treated the same as the underlying activity (trade/business or passive). See IRS Notice 89-35 and Reg §1.163-8T.
FYI, a loan to the partnership would have meant that the interest would be investment interest.