K1

[Unregistered]

I have a new client that has brought me their 2004 return to do(don't you just love them). Included is a K1 2 partners. The other partner filed the 1065. My client has expenses that were not reflected or calculated into the K1 or 1065. Where should these expenses be reported on his return? I say SCH E.

[Jesse]

P-ship Agreement

Unreimbursed P-ship expenses can only be taken if it is written up in the partnership agreement as such. If so, then yes the expenses are taken on schedule E. If not I think Schedule A subject to the 2% AGI.

[jimmcg]

Unreimbursed Part Exp

Agree with above. Taken on Schedule E, Part 2 ..........It's in The Tax Book

[jimmcg]

Unreimbursed Part Ext

Just checked...........Read page 20-5 of Tax Book

[Unregistered]

I appreciate all your input. I ordered my taxbook today, received a flier in the mail then started reading the forum. This is a great resource to have. In 2002 and 2003 they have split these expenses between SCH A and C. Guess I'll amend those years. Once again thank you.

[OldJack]

UPE or Sch-A

I agree with Jesse. 1040 Sch-E, UPE deduction is only for expenses specifically required to be paid by the partnership agreement.

Unreimbursed Partnership
Expenses
You can deduct unreimbursed ordinary
and necessary partnership expenses
you paid on behalf of the partnership on
Schedule E if you were required to pay
these expenses under the partnership
agreement (except amounts deductible only as
itemized deductions, which you must enter
on Schedule A)

[Renee]

K1

I have found after speaking with the other partner that not all things have been done correctly. I now have another new client with a can of worms. Your responses are reassureing to what I already knew, it's always nice to have that.