Schedule K-1 (Form 1065) - UPE Business Use Of Home

You can deduct qualified expenses for the business use of your home 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:

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:

  1. From within your TaxAct return (Online or Desktop), click Federal (on smaller devices, click in the top left corner of your screen, then click Federal).
  2. Click the Business Income dropdown, then click Partnership income (Form 1065 Schedule K-1).
  3. Click + Add Partnership Schedule K-1 to create a new copy of the form or click Edit to review a form already created (desktop program: click Review instead of Edit).
  4. Continue with the interview process until you reach the screen titled Partnership - Unreimbursed Partnership Expenses, then enter your information in the fields provided.
  5. On the screen titled Partnership - Schedule K-1 Information, click the Checkbox next to Box 1 - Ordinary business income (loss).
  6. On the screen titled Partnership - Ordinary Income, enter the 1 - Ordinary income or loss amount.
  7. On the screen titled Partnership - Material Participant, click the Circle next to Material Participant or Not Material Participant.
  8. On the screen titled Partnership - Business Use of Your Own Home, click Yes.
  9. Continue with the interview process to enter your information.

Per IRS Publication 587, 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.

  • Schedule E (Form 1040), Supplemental Income and Loss.
  • Schedule SE (Form 1040), Self-Employment Tax.
  • Schedule K-1 (Form 1065), Partner's Share of Income, Deductions, Credits, etc.

More information. For more information about partners and partnerships, see Publication 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 webpage or document at the time it is accessed.