Interest Expense for Oil Investment
Based on my reading, for debt-financed acquisition of an LLC or S-Corp, the interest paid on that debt is deductible to offset any passive income. Link: http://archives.cpajournal.com/2000/0400/Departments/d45500a.htm#:~:text=Passive%20int I’m curious to know if I acquire debt to invest in an oil investment, where I will receive a Schedule K, will I be able to deduct that interest? If so, where would I be able to. Secondly, if I am not a general partner, I’m told that I can’t not take 75% of the investment as intangible drilling costs in Year 1 then it would be distributed through 5 years. I’m trying to find the literature for that. As well as, would that deduction go against active income?
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