PatriciaV
Employee Tax Expert

Business & farm

If you were required to pay these expenses under the partnership agreement, you may report your vehicle mileage and other business-related expenses on Schedule E (Partnership Income) as "Unreimbursed Partnership Expenses" (UPE). In this case, TurboTax will ask you about UPE (see screenshot below - click to enlarge), with follow-up entry at the end of the Schedule K-1 input.

But if the partnership agreement specifically states that the partnership has a non-reimbursement policy when expenses are incurred outside of the partnership or that it does not specifically require partners to pay for certain expenses, the deduction may be disallowed at the partner level.

See instructions for Form 1040, Schedule E for more info from the IRS.
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