If Schedule K-1 came from Form 1120S, S corporation shareholders generally cannot deduct unreimbursed business expenses with Schedule K-1 because the shareholders are categorized as employees when performing services for the corporation (and a corporate officer may be considered a statutory employee).
These expenses, if not subject to reimbursement from the corporation, are unreimbursed employee business expenses treated as miscellaneous itemized deductions subject to the 2% of the adjusted gross income (AGI) floor. However, with the Tax Cuts and Jobs Act (TCJA) this deduction has been eliminated on the federal return. However, you still may want to enter it in case it is allowable on your state return.
In this case, enter the home office expenses under Deductions & Credits > Employment Expenses > Job Expenses for W-2 Income.
For more from the IRS, see: S Corporation Employees, Shareholders and Corporate Officers
