PatriciaV
Expert Alumni

Business & farm

Yes, if the partnership agreement doesn't specifically state that a partner is required to pay partnership expenses without reimbursement, the partnership would need to establish an "accountable plan" for reimbursement. See the rules here: IRS Pub 463 Accountable Plans.

 

Under an Accountable Plan, the partner submits a reimbursement request to the partnership for which the expense was incurred. When the partnership pays the reimbursement, the cost is recorded as a Miscellaneous Expense. This appears on Form 1065 Line 21 with a custom description.

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