Can I use my partnership passive K-1 loss to offset some of my interest income?

Generally not. Interest income is defined as portfolio income, not passive income. Portfolio income includes interest, dividends, and gains on the sale of investment property. Passive K-1 losses can only be used to offset other passive income, except when the $25,000 special loss allowance for persons with active participation in rental real estate entities can be utilized. Speak to your local CPA about your K-1 loss deductibility.