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New Member
posted Mar 2, 2024 11:39:52 AM

My wife and I own an muti-member LLC and we have filed our 1065 and K-1 forms. We both drove for the business in our own personal vehicles how do we expense the miles?

The car is in our own personal names and not the business, therefore we aren't able to deduct it on the 1065 form. It was mentioned you do it when filing as individuals. However I don't see a spot to indicate mileage expense. I don't think it would be under schedule C because we got a K-1. Help please.

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1 Best answer
Level 15
Mar 2, 2024 1:20:25 PM

It would be an "Unreimbursed Partnership Expense" (UPE).  When entering your K-1, it should ask about that.

10 Replies
Level 15
Mar 2, 2024 12:58:53 PM

Did the Partnership reimburse you for those expenses?

 

Does the Partnership Agreement specifically state it will NOT reimburse you for those expenses or state that you are responsible for those expenses? 

New Member
Mar 2, 2024 1:05:29 PM

The partnership didn't reimburse us, for when filling out the 1065 and K-1 vehicle expenses do come up, but only if the company owns the vehicle. Therefore I was told to file that as an expense when filing our taxes given this multi-member LLC is a pass-thru. The agreement doesn't specify one way or another.

 

It's a company my wife and I own. We are the only two employees; this is our first time filing the 1065 and now we have a K-1. 

Level 15
Mar 2, 2024 1:09:52 PM

You didn't answer my second question.

New Member
Mar 2, 2024 1:12:33 PM

I mentioned the partnership agreement doesn't specify one way or another when we set up the company. It didn't go into that kind of expense. 

Level 15
Mar 2, 2024 1:16:22 PM

I'm sorry, I missed that sentence.  I guess I read it too quickly.

 

If the Partnership Agreement doesn't state that, it is not deductible anywhere.

 

To avoid future mishaps, I HIGHLY recommend going to a good tax professional so that you don't make further mistakes.

New Member
Mar 2, 2024 1:18:51 PM

Okay for future reference. Where would it be denoted as an expense? Given on the 1065 a personal car wasn't allowed and therefore it would be within a personal tax return. 

Level 15
Mar 2, 2024 1:20:25 PM

It would be an "Unreimbursed Partnership Expense" (UPE).  When entering your K-1, it should ask about that.

New Member
Mar 2, 2024 1:22:44 PM

Okay, thank you for the clarification. Last question, are those then expenses that are usually granted or filed when doing the 1065 and K-1 from the business to the members? Or it's only done on a UPE? 

Level 15
Mar 2, 2024 1:24:39 PM

If the Partnership did not reimburse the expenses, nothing goes on the Partnership return or the K-1s.  It would only be UPE on the personal tax return (I think TurboTax asks for it when entering the K-1 on your personal tax return).

New Member
Mar 2, 2024 1:25:46 PM

Thank you for your help.