How to report K-1 box 13 deductions from multiple partnerships on tax return

Wait, I thought code AE was for excess business interest expense? Doesn't that have to go on Form 8990 instead of just directly on Schedule E? And for code L, aren't some portfolio deductions still allowed if they're investment related? This is so confusing.

You're absolutely right about code AE - I misspoke. Code AE is indeed for excess business interest expense which is subject to limitation. It does need to be reported on Form 8990 "Limitation on Business Interest Expense." This form will help determine how much of that interest expense you can deduct this year. Any amount that can't be deducted this year will be carried forward to future tax years. Regarding code L, while some investment expenses are still deductible, most miscellaneous itemized deductions that were subject to the 2% of AGI floor were suspended by the TCJA through 2025. Investment expenses that would have gone on Schedule A line 16 are generally part of those suspended deductions. However, certain investment interest expenses reported elsewhere may still be deductible.

Did it explain why some items are deductible and others aren't? My accountant charges me by the hour to explain this stuff and I'm trying to understand it myself this year.

How do you know this site is safe? I'm always nervous about uploading tax documents to random websites. Did you have to create an account? How much did it cost?

It actually did provide explanations for each code and why certain deductions are allowed while others aren't. For example, with code AE (excess business interest), it explained how the business interest limitation works and walked me through the Form 8990 calculations. Much clearer than the IRS instructions. The site uses bank-level encryption and doesn't store your documents after analysis. You do need to create an account, but only with an email - no social security numbers or anything like that. They just analyze the documents and provide guidance, they don't file anything. I found it really helpful for understanding what I was looking at rather than just blindly entering numbers.

How does this even work? I thought it was impossible to get through to the IRS. Are you saying this service somehow gets you to the front of the phone queue?

This sounds like BS honestly. The IRS wait times are because they're understaffed. No way some random service can magically get you through unless they're doing something sketchy.

It uses a technology that monitors the IRS phone lines and calls repeatedly until it gets through. When it reaches a real person, it connects you to the call. It's basically doing the waiting for you. I was skeptical too, but it worked surprisingly well. No, it's not putting you "at the front of the line" - it's just automating the process of calling, navigating the menu options, and waiting on hold so you don't have to. I waited days trying to get through on my own with no success. With Claimyr, I got a call back within about 45 minutes when they connected with an agent.

Do other tax software programs handle K-1s well too? I'm using FreeTaxUSA this year to save money but worried it might not handle these complex forms correctly.

FreeTaxUSA does support K-1 entries, but in my experience, it doesn't provide as much guidance as TurboTax when dealing with the more complex codes. For something like box 13 code AE, which requires Form 8990, you might need to be more careful and double-check that it's flowing to the right places. If you're dealing with multiple partnerships and complex K-1 issues, it might be worth spending the extra money on more comprehensive software just to make sure everything is handled correctly. The premium tax software usually has better error checking for these situations.

Thanks, that makes sense about code AE. Do you know if partnerships ever send corrected K-1s? One of mine came super late and I'm worried they might send a corrected one after I file.

Yes, partnerships can definitely send corrected K-1s, and unfortunately they sometimes come pretty late in the filing season. If you receive a corrected K-1 after you've already filed, you'll need to file an amended return (Form 1040X) to correct any errors. The good news is that if the corrections result in you owing more tax, you generally won't face penalties as long as you file the amended return promptly after receiving the corrected K-1. If the corrections result in a refund, you can claim it through the amended return. To be safe, you might want to reach out to the partnership directly to ask if they expect to issue any corrections. Some partnerships will give you a heads up if they're still working through their numbers.

This is such a comprehensive and practical summary - thank you! I especially appreciate the tip about creating a spreadsheet to track everything. I'm dealing with my first year of multiple K-1s and was feeling overwhelmed trying to keep all the different codes and amounts straight. One question about your point #3 regarding keeping records of suspended deductions: Should I be documenting these on a specific form or just maintaining my own records? I want to make sure I'm prepared if the TCJA provisions do expire in 2026 and these deductions become available again. Also, for anyone else reading this thread, I wanted to mention that my partnership actually included a supplemental statement that broke down exactly what expenses made up each box 13 code. It was attached as a separate PDF with my K-1 documents. Definitely worth checking all the documents you received, not just the main K-1 form itself!

@a6557b2470b8 Great question about record-keeping for suspended deductions! There isn't a specific IRS form for tracking suspended miscellaneous itemized deductions, but I'd recommend maintaining your own detailed records. Keep copies of the K-1s, partnership statements, and create a simple log showing the year, partnership name, code L amount, and description of expenses. You might want to create a file labeled something like "Suspended Deductions 2024" and update it each year. If TCJA provisions do expire in 2026, having this documentation will be crucial for claiming any previously suspended amounts. Also, excellent point about checking all the documents that come with K-1s! I've seen too many people miss important supplemental information that was attached separately. Some partnerships also post additional guidance on their investor portals, so it's worth checking there too if you have online access. One more tip - if you're using tax software, many programs will actually carry forward this suspended deduction information automatically if you enter it correctly each year, which can save you from having to recreate everything manually later.

@a6557b2470b8 Great question about record-keeping for suspended deductions! While there's no specific IRS form required for tracking suspended miscellaneous itemized deductions, I'd recommend maintaining your own detailed records. Keep copies of the K-1s showing the code L amounts, any partnership statements explaining what the expenses were, and a simple spreadsheet tracking the amounts by year. If the TCJA provisions expire in 2026, you'll likely need to reference these suspended amounts when determining what becomes deductible again. The IRS doesn't maintain these records for you, so having your own documentation will be crucial. Your point about the supplemental statement is spot-on - those additional documents are often where the real details are hiding. For anyone else reading, also check for any "Tax Basis Capital Account Analysis" or similar attachments that partnerships sometimes include. These can provide valuable context for understanding the various K-1 line items. One more tip: if you're using tax software, many programs will let you enter notes or create carryover worksheets for items like this. It's worth documenting suspended amounts there too, so you have the information readily available in future tax years.

@0ed7380d6592 Great question about record-keeping for suspended deductions! There isn't a specific IRS form for tracking suspended miscellaneous itemized deductions, but you should definitely maintain your own records. I recommend creating a simple document that includes: - Tax year the deduction was suspended - Type of expense (from the partnership's supplemental statement) - Amount that would have been deductible - Which partnership it came from - The K-1 box 13 code Keep copies of your K-1s and any supplemental statements with your tax records. If TCJA provisions expire in 2026, you'll want to be able to show what was previously suspended. Also, that's a great point about checking all documents! Some partnerships are really good about providing detailed breakdowns, while others just give you the bare minimum. The supplemental statements can make a huge difference in understanding what you're actually dealing with - especially for determining if any code L items might qualify for current deductions under the narrow exceptions.

@a6557b2470b8 Great question about documenting suspended deductions! There isn't a specific IRS form for tracking these, so maintaining your own records is the right approach. I'd recommend keeping: 1. **Copies of all K-1s** with the suspended code L amounts highlighted 2. **A simple tracking sheet** showing year, partnership name, code L amount, and description of expenses (from partnership statements) 3. **Partnership supplemental statements** that detail what the expenses were The IRS doesn't require you to file anything for suspended deductions, but if TCJA expires and these become deductible again in 2026, you'll need this documentation to support any carryforward claims. Your point about checking all documents is so important! Many people miss those supplemental statements that explain the box 13 codes in detail. I've seen cases where what looked like a suspended code L deduction actually included some investment interest expenses that were still deductible - but you'd only know that from reading the partnership's breakdown. For anyone organizing these records, I'd also suggest noting which tax software or preparer you used each year, since they might have specific ways of tracking suspended items that could be helpful later.

@a6557b2470b8 Great question about record-keeping! There isn't a specific IRS form for tracking suspended deductions, but you should definitely maintain your own detailed records. I recommend keeping copies of your K-1s along with any partnership statements, and create a simple spreadsheet showing the tax year, partnership name, code L amount, and description of the expenses. The key is being able to demonstrate that these were legitimate deductions that were suspended due to TCJA, not disallowed for other reasons. If the provisions expire in 2026, you'll want to show the IRS exactly what was suspended and when. Your point about the supplemental statement is spot-on - that's exactly the kind of documentation everyone should look for. Some partnerships are really good about providing detailed breakdowns, while others just give you the bare minimum. That supplemental PDF you found is gold for tax preparation! For anyone still reading this thread, I'd also suggest keeping copies of the tax software screenshots or forms where you entered these suspended amounts, even if they didn't result in a deduction. It creates a paper trail showing you properly identified and tracked these items during the suspension period.

@0ed7380d6592 Great question about record-keeping for suspended deductions! There isn't a specific IRS form for tracking suspended miscellaneous itemized deductions, so maintaining your own records is the way to go. I'd recommend keeping a simple spreadsheet or document that shows: - Tax year the deduction was suspended - Type of expense (investment advisory fees, etc.) - Amount that would have been deductible - Source (which partnership K-1) This way, if TCJA provisions expire and these deductions become available again, you'll have the documentation needed. Some tax software might track this automatically, but it's always good to have your own backup records. That's excellent that your partnership provided the supplemental breakdown! Not all partnerships are that thorough, so you're lucky to have that detail. It makes determining what's truly suspended versus potentially still deductible much easier.

Great point about checking for those supplemental statements! For documenting suspended deductions from code L, there's no specific IRS form for tracking these during the suspension period, so maintaining your own records is the way to go. I'd recommend keeping a simple spreadsheet with columns for: tax year, partnership name/EIN, code L amount, description of the expenses (from the partnership statement), and any notes about potential exceptions. Also save copies of the partnership statements that detail what these expenses represent. The key thing is being able to demonstrate what was suspended and in what years if the deductions do become available again in 2026. Since these would likely be subject to the 2% AGI floor again (if TCJA expires), having detailed records will help you properly calculate any carryforward amounts. One more tip - if you use tax software, some programs will actually track suspended miscellaneous itemized deductions automatically and carry the information forward year to year, even though they're not currently deductible. This can be helpful for record-keeping purposes.

@a6557b2470b8 Great question about record keeping! For suspended deductions under TCJA, there isn't a specific IRS form to track them, so maintaining your own records is the way to go. I'd recommend keeping a simple spreadsheet or document that shows: - Tax year the deduction was suspended - Source (partnership name and EIN) - Amount and type of expense (from the partnership's supplemental statement) - Box 13 code The key is having enough detail to properly classify and report these amounts if they become deductible again in 2026. Since these are miscellaneous itemized deductions, you'll likely need to meet the 2% AGI threshold when/if they're reinstated. That's excellent advice about checking for supplemental statements! I've noticed that partnerships vary widely in how they provide this information - some include detailed breakdowns, others just give you the codes. The more detail you have now, the better prepared you'll be for future tax years or if you ever get questioned about the treatment of these items.

@a6557b2470b8 Great question about record-keeping for suspended deductions! There's no specific IRS form for tracking suspended miscellaneous itemized deductions, so maintaining your own records is the way to go. I'd recommend keeping a simple spreadsheet with the tax year, partnership name, K-1 code, amount, and description of the expense. What's particularly important is keeping the partnership statements that detail what these expenses actually are - investment advisory fees, tax preparation fees, etc. If the TCJA provisions expire and these become deductible again in 2026, you'll need that documentation to properly categorize them. Some tax software programs also maintain carryforward worksheets for various suspended items, so if you're using the same software year after year, it might automatically track some of this information for you. But having your own backup records is always wise. Your point about the supplemental statement is spot-on - those detailed breakdowns are incredibly valuable and often get overlooked. I'd recommend saving those PDFs in a dedicated tax folder since they're not always easy to get again from the partnership later if you need them.

@a6557b2470b8 Great question about record-keeping for suspended deductions! There isn't a specific IRS form required for tracking these, but I'd recommend maintaining your own detailed records with: - Copy of the K-1 showing the code L amount - The partnership's supplemental statement describing the expenses - Your tax return showing the amount was not deducible due to TCJA suspension - A simple log with tax year, partnership name, amount, and expense type This documentation will be crucial if the provisions expire in 2026, as you'll need to prove these were legitimate expenses that were only suspended, not permanently disallowed. Your point about the supplemental statement is spot-on! Many taxpayers miss these because they're often separate PDFs or pages that don't look like part of the main K-1. These statements are goldmines for understanding what you're actually dealing with, especially for the more obscure box 13 codes. For anyone else reading - if your partnership uses a tax software provider, they often have a client portal where all K-1 documents are stored together. Worth checking there if you think you might be missing supplemental information.

@a6557b2470b8 Great question about record-keeping for suspended deductions! There's no specific IRS form for tracking suspended miscellaneous itemized deductions from partnerships, so maintaining your own detailed records is the way to go. I'd recommend creating a simple tracking document that includes: - Tax year the deduction was suspended - Partnership name and EIN - K-1 box 13 code (usually L) - Amount suspended - Description of the underlying expense (from partnership statements) This documentation will be invaluable if TCJA provisions expire and these deductions become available again in 2026. You'll want to be able to demonstrate to the IRS (or your tax preparer) exactly what amounts were suspended in which years. Also, excellent point about checking all the partnership documents! Those supplemental statements are often the key to understanding whether any portion of code L amounts might qualify for current deductions under the narrow exceptions that still exist. I've seen too many people miss out on legitimate deductions simply because they didn't realize the partnership had provided the necessary detail in a separate attachment.