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in revenue rule 86 dash 138 some individuals owned partnership he partnership p was the limited partner in partnership s the general partner of partnership s was corporation ex partnership s engaged in construction activities during the year partnership s paid interest expense on debt incurred to purchase property that was held for investment the individual partners of partnership p may be subject to the investment interest expense limitation under section 163 d the fact that the investment interest expense flows up through an intermediate partnership that is partnership p does not change the character of the item to the individuals as a result both partnership s and partnership p must separately state the investment interest expense and investment income under section 703
