Question

Unreimbursed Partnership expenses

Forum|Forum|3 years ago
March 29, 2023
1 reply
0 views

I have Turbo Tax deluxe and when I enter my K-1, it asks me if I have unreimbursed business expenses, which I do. I entered my vehicle expenses, but they are showing on form 1065 as passive activity losses suspended for the current year. I can't figure out how to get them to show as expenses for the current year. Perhaps I am entering them incorrectly, or do I need a different version of TurboTax?

Thanks in advance for any help you can provide.

J

JamesG1

In TurboTax Premier, I am able to report a partnership K-1 with unreimbursed business expenses. The expenses are reported as 'UPE' in Part II Page two of IRS Schedule E.

The losses and expenses may be limited by the passive activity loss limitations on IRS form 8582 Passive Activity Loss Limitations.

Reporting of K-1 income and expense may not be available in the Deluxe version of TurboTax.

@mamarini5

**Say "Thanks" by clicking the thumb icon in a post**Mark the post that answers your question by clicking on "Mark as Best Answer"

M

mamarini5Author

I just upgraded to Turbo Tax home & Business, assuming it would allow for my unreimbursed partnership expenses to be recognized on schedule E. Schedule E, supplemental business expense worksheet, is showing the UPE and reduces my net self employment income by the UPE. But, on the 1040, the partnership income is coming over without any adjustment for the UPE, so it's computing federal tax on the gross income amount instead of the net self employment income. I am answering yes to the question "does the partnership require you to pay any expenses out of your pocket?" Could I be missing a step to allow the net self employment income to flow through to the 1040?

My state return (NJ) is correctly picking up the UPE and showing the net amount as taxable income. So I can't figure out why the federal is not doing the same.

Any additional help would be appreciated.

V

Vanessa A

If your net self-employment income is being reduced, then your overall income on line 9 of your 1040 would also be reduced.

You will not see a change on your K-1 worksheet, only on the Schedule E worksheet. Then you will see the number from the Schedule E worksheet on line 5 of Schedule 1. This will then flow to line 8 of your 1040. Then your line 9 will be over all lower.

Line 8 on your 1040 will be a sum of all of your other income from Schedule 1.

When I walk through the steps, I see all the proper changes and reporting in my return. If you are not, then you can try deleting the Schedule E worksheet and looking at your numbers, then re-entering them. But, before you do that start with looking at the lines mentioned above. You can also use the Data Source feature to see where the numbers are coming from. To do this hover over line 8 on your 1040, click the magnifying glass then repeat until you back track through all the sheets and see all the numbers that compose line 8.

**Say "Thanks" by clicking the thumb icon in a post**Mark the post that answers your question by clicking on "Mark as Best Answer"