K-1 question about UE

[DTS]

What is the correct code to enter unreimbursed expenses a partner pays? I used to put it as code W in box 13, but cannot find it any longer. Seems that was changed year before last??

The only option I can find is 13 code V. Also, I am finding the way I have this listed with code V that it is not showing this as a contribution to capital. Am I correct that it should show up that way?

Thank you,

Dennis

[S T]

Ure

Are you talking about the partner's unreimbursed expenses for the partnership?
If so, goes on the partners return Schedule E page 2, I don't think it shows on the K-1 form.

There is a place in the software, K-1 received on the partner's return toward the bottom to enter those expenses and it will flow through.

If you can't find it, call me.

Sandy

[DTS]

K-1

It should show on the K-1 and then flow to pg. 2. I am playing with the program to see if I can get it to show on Sch K, as well. Right now, it's not.

Dennis

[S T]

I don't think so

I don't think so,

If partner has unreimbursed expenses, he has not submitted to the Partnership. So the partnership does not take a deduction, and should not be in the partnership accounting records.

If the partner submits the expenses to the partnership, and the partnership reimburses the expenses, then that is shown in the ordinary income/loss of the partnership and then the partner would not be entitled to any deduction on his own personal return, schedule E, page 2.

If the partner is not reimbursed by the partnership then the partern takes his unreimbursed expenses on page 2 of the Schedule E, obviously if that is what the partnership agreement says.

Sandy

[Lion]

Agree with Sandy

Don't mean to gang up on you, Dennis, but I agree with Sandy on this one. The partnership could have no knowledge of unreimbursed expenses of a partner. It might have an agreement saying partners must drive their own cars at their own expense to sales meetings at clients' sites, but still not know the amounts or any other details. So, I really don't think that info goes on the K-1. Just the F1040, Schedule E.

[DTS]

Sch K

Sandy,

What I have been doing in the past is to go into make special allocations for Sch K. In there we can override and put in each partner's UE that will flow to their K-1, box 13 in addition to showing this amount as a capital contribution on the K-1 and then to E, pg. 2. The program will also add all the partners' UE and put them on Sch K, with a statement.

Maybe, I'm not thinking this out correctly. I sure don't know what the heck is going on here. Let me work on it a bit more.

Dennis

[S T]

Ummmm

Shouldn't not be on the 1065 at all, each partner takes care of it on their own return.

The partnership would not know about the unreimbursed expenses.

In the software on the individual form 1040, there is an area at the bottom for you to enter the "partner's" unreimbursed expenses which will flow through to the Schedule E, page 2

S

[DTS]

I don't think

you are ganging up on me. I appreciate the help and that's why I posted.

However, I am really beginning to second-guess myself at this point. I may have incorrectly misplaced this item in one section under "other deductions" on a couple of past returns, but correctly input it on the personal return for K-1s received where it's labeled UE.

Now I'm just upset with myself for this error and will worry about this.

Dennis

[Lion]

Separately Stated

As long as it wasn't on the body of the 1065. If it was separately stated and only reported -- with any bottom line effect -- on the 1040, don't lose any sleep over it. I wouldn't even mention it to the client and certainly not amend, since you reported it on E as it should be.

[DTS]

Lion

What I did was put this amount in two spots, one correct, one incorrect. The incorrect place then placed this amount in as a capital contribution. I am upset, but there is not much harm done at this point, as this partnership closed last year and not because of this error!

Dennis