Business & farm

You could deduct the expenses on the partnership return either by reimbursing the partners for the expenses or recording a note payable to them for the same and then charging the various expenses when you record the payment or loan. Another less complicated option would be to deduct the unreimbursed partner expenses when you enter the partnership Schedule K-1 on your personal return. You will see a screen that says Describe the Partnership and there will be an option to indicate you payed expenses on behalf of the partnership. On the screens that follow you can list your expenses and they will be deducted from your income via an entry on Schedule E:

You could treat the expenses as cash contributed if you didn't want to deduct them. If you deduct them however, they wouldn't be consider contributed capital.