I have a device that has a K line output for fault code reading.
We can't help with mystery devices. Tell us what the device is (a link) if you want help interfacing with it.
I already have a transceiver chip that will change read the K line data and change it to a usable output to a cpu.
"change read"?
Is this chip connected to the Arduino? What chip is it? How is it connected to the mystery device?
What does any of this have to do with reading serial data?