where to you enter a new vehicle on 1065 tax return and can i take the mileage deduction instead of the actual expense deduction?

[JamesG1 · Accepted solution]

Corporate and partnership employers may not use the standard mileage method to compute the auto expense for company owned cars. In other words, actual auto expenses are deducted at the partnership level.

However, partnerships may use the standard mileage rate to reimburse employees for business use of the employee's vehicle.

If the partner used his or her own vehicle and is reimbursed by the partnership, the reimbursement can be computed based on the standard mileage rate. Then the partnership can enter the "actual" expenses (in this case, the amount of the reimbursement) on the partnership return.

The member or employee is being reimbursed under an accountable plan.  Input your own description such as reimbursed vehicle mileage or auto mileage.

See TurboTax Best answer.
 

[TKELLY001]

I appreciate the answer. What if the partnership did not reimburse the mileage? Would I deduct it on my personal tax Sced C?

[PatriciaV]

If you receive Schedule K-1 from the partnership, you may be able to claim Unreimbursed Partnership Expenses (UPE), including vehicle mileage. You must be required to pay these expenses under the partnership agreement. See IRS instructions for Form 1040, Schedule E for the UPE rules.

If you qualify to report Unreimbursed Partnership Expenses, you will enter this during the interview for the related Schedule K-1.

1. Go to Income >> Schedule K-1 >> Start/Update
2. Choose Partnership/LLC and Add or Edit your K-1.
3. Follow the prompts to a page titled "Describe the Partnership."
4. Check the box for "I am required to pay supplemental business expenses on behalf of this partnership/LLC for which I am not reimbursed."
5. Answer "yes" to the question about "...your own pocket?".
6. Answer "yes" to the question about vehicle expenses.
7. Continue to enter your vehicle information.
8. If you do not own the vehicle (ex: the Partnership holds the title), you will be able to report expenses, but you won't be able to use the standard mileage method.
9. Continue to the end to see your total vehicle deduction.
10. You will be given the opportunity to report other expenses on subsequent pages.
11. Be sure to report any reimbursements you received from the partnership.
12. Continue back to the K-1 Summary page to save your entries.

Your entries will appear on the Supplemental Business Expenses Worksheet (Suppl Exp - P) under the related K-1 Partner for this Partnership.

@TKELLY001