Where does the amount entered in screen K1P, box 13, Code WA flow to?
Generally, code WA, Interest expense allocated to debt-financed distributions, flows to the Wks K1P Detail Adj Basis, line 10k, then to Schedule E, page 2, line 28. The following items may impact whether the amount is allowed or limited:
- Activity type,
- Current year K-1 income or loss,
- Partner's basis.
If the amount is not showing on Schedule E, page 2 as expected, review the Wks K1P Detail Adj Basis and Form 8582 (if applicable). See the Partner’s Instructions for Schedule K-1 (Form 1065) for additional information.
Code WA is Code AC starting in Drake23. See KB 18342 for details.