Deducting qualified expenses for the business use of your home is possible when filing a Partnership return. The amount calculated per the worksheet in IRS Publication 587 (see information below) would be entered as unreimbursed partnership expenses on the Schedule K-1 (Form 1065) Partner’s Share of Income, Deductions, Credits, etc., and the adjustment on the Self-Employment Tax Worksheet using the following instructions:
Enter unreimbursed partnership expenses (not deductible as an itemized deduction on Schedule A (Form 1040) Itemized Deductions), directly on the Schedule K-1 form in the Additional Information section.
Note. There is a separate supporting worksheet to enter the business use of your home expenses.
The total amount of unreimbursed partnership expenses will flow to Schedule E (Form 1040) Supplemental Income and Loss, page 2. The name on Line 28 of Schedule E will be reflected as "UPE" (unreimbursed partnership expenses). This amount will also flow to the Schedule SE as an adjustment.
To enter the unreimbursed partnership expenses (including for the business use of your home) in your TaxAct® return:
You will want to be sure to address the question in the Q&A regarding material participation as expenses are only transferred to Schedule E, page 2 if you did materially participate. To indicate whether you materially participated in the partnership, follow these steps:
Per IRS Publication 587 Business Use of Your Home (Including Use by Daycare Providers), on page 20:
You may be allowed to deduct unreimbursed ordinary and necessary expenses you paid on behalf of the partnership (including qualified expenses for the business use of your home) if you were required to pay these expenses under the partnership agreement and they are trade or business expenses under section 162.
If you are using actual expenses to figure your deduction for the business use of your home, use the Worksheet To Figure the Deduction for Business Use of Your Home, later. If you are using the simplified method to figure your deduction for the business use of your home, use the Simplified Method Worksheet, later.
Deducting unreimbursed partnership expenses. See the following forms and related instructions for information about deducting unreimbursed partnership expenses.
More information. For more information about partners and partnerships, see Pub. 541, Partnerships.
Note that any link in the information above is updated each year automatically and will take you to the most recent version of the document at the time it is accessed.