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Hawaii Total Investment Interest Expense

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Question
Hawaii Total Investment Interest Expense

Answer

Enter the investment interest paid or accrued during the tax year, regardless of when you incurred the indebtedness. Investment interest is interest paid or accrued on a loan (or part of a loan) that is allocable to property held for investment (as defined later).

Include investment interest expense reported to you on Schedule K-1 from a partnership or an S corporation. Include amortization of bond premium on taxable bonds purchased after October 22, 1986, but before January 1, 1988, unless you elected to offset amortizable bond premium against the interest payments on the bond. A taxable bond is a bond on which the interest is includible in gross income.

Investment interest expense does not include the following:

  •  Home mortgage interest.
  •  Interest expense that is properly allocable to a passive activity. Generally, a passive activity is any business activity in which you do not materially  participate and any rental activity. See the separate instructions for federal Form 8582, Passive Activity Loss Limitations, for more details.
  • Any interest expense that is capitalized, such as construction interest subject to section 263A.
  • Interest expense related to tax-exempt interest income under section 265.
  • Interest expense, disallowed under section 264, on indebtedness with respect to life insurance, endowment, or annuity contracts issued after June 8, 1997, even if the proceeds were used to purchase any property held for investment.

HI N 158 Information


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Views: 508 Created on: Jun 15, 2013
Date updated: Sep 16, 2015
Posted in: STATES, Hawaii

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