Unreimbursed partnership expenses

[oceanlovin'ea]

Is there somewhere on the individual k-1 that the amount of unreimbursed partnership expenses are listed?

I know that it goes on page 2 of Schedule E along with the partnership income/loss. But I didn't know if it has to show up on their k-1 also.

Thanks.

Linda

[Edsel]

No requirement

Linda, don't think there is a requirement on the K-1. The UPE are supposed to be outside the avenue of normal profit splitting and apportionment, and in fact the preparer of the 1065 might not even be aware of what each partner's UPE might be.

There are provisions for descriptive data on the K-1 and its possible there might be some disclosure there, but nothing which should be relied upon to be the "trigger mechanism" for UPE.

Whether or not there is any information on a K-1 for UPE, the important thing to remember is the requirement must exist in the partnership articles for that partner to provide or incur the expenses outside the scope of partnership reimbursements.

[oceanlovin'ea]

They do have it written in the partnership articles that they will have expenses that are deductible but that the partnership will not reimburse them for. I did make sure they had the right information in setting up the LLC.

Thanks

[ChEAr$]

Such expenditures are not a partnership item to appear anywhere on 1065 or any K1 associated therewith.

[luke]

ChEAr$

where on Sch E pg2 would those UPE go?

[Matt Sova]

Upe

Luke:

You list them underneath the K-1 information for the partnership on page 2. You put the name of the partnership with UPE after it like this:

XYZ Partnership - UPE

Put the partnership EIN in the EIN box and the amount of UPE as Nonpassive Loss.

[snowshine]

If the partner's share of partnership income is subject to SE tax then you also will need to do a manual adjustment for the net SE income.