This article will help to understand how investment interest expense is calculated and why it shows on Line 14 of Schedule A.
To report an investment interest expense:
- Go to the Input Return tab.
- Select Deductions > Itemized Deductions (Sch A) from the left menu.
- Go to the Interest tab from the top section menu.
- Scroll to the field Investment Interest and expand the input field with the + icon.
- Enter a Description and Amount.
Investment interest expense shows on Schedule A, Line 14
- ProConnect Tax carries the amounts to Form 4952. When investment interest exceeds net investment income, the program includes the deductible part on Schedule A.
- If the investment interest is fully deductible, then Form 4952 won't generate and the deduction will flow to Schedule A, Line 14.
- Additional inputs can be found in the Deductions section in the Investment Interest (4952) screen.
- Investment interest from a passthrough K-1 should be entered in the applicable passthrough K-1 screen in the Income section: Partnership Info - 1065 K-1, S-corp Info 1120S K-1, Estate or Trust Info 1041 K-1.