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How to enter unreimbursed partnership expenses for Schedule E in Lacerte

by Intuit Updated 1 year ago

This article will help you enter unreimbursed partnership expenses (UPE) in an individual return to print on Schedule E, line 28, and understand why UPE may be generating on a return.

Entering UPE directly

If you don't need Lacerte to calculate the amount of UPE, or if your client's Schedule K-1 reported an unreimbursed expense that isn't automatically calculated by the program, you can enter the UPE directly as an adjustment. This adjustment won't override any UPE generating from other screens or entries in the return; it just increases the amount reported on Schedule E, line 28.

Follow these steps to directly enter UPE:

  1. Go to Screen 20.1, Passthrough K-1s.
  2. Select the appropriate partnership K-1.
  3. Scroll down to the Separately Stated Income and Deductions section.
  4. Enter the amount in Unreimbursed expenses (enter as positive) [A].

Basis carryovers

Basis carryovers from prior year unreimbursed expenses can be entered on this screen, too - just scroll down to the Basis Carryovers section, and enter the amount in Unreimbursed expenses.

Linking expenses to the K-1

Besides direct entries, the program can calculate any of the following deductions as UPE long as you link your input to Schedule E (partnership):

  • Allowable expenses for Business Use of Home
  • Vehicle expenses
  • Unreimbursed expenses such as meals and entertainment
  • Current depreciation or special depreciation allowance for qualified property

Follow these steps to have Lacerte calculate UPE:

  1. Go to the appropriate screen:
    • Screen 22 Depreciation or Screen 23 Direct Input (4562),
    • Screen 29 Business Use of Home (8829), or
    • Screen 30 Vehicle/Employee Expense (2106) to enter meals, entertainment, or vehicle expenses when not depreciating the vehicle.
  2. In the Form (Ctrl+T) field, choose Schedule E (partnership).
  3. Select the applicable partnership's name in Activity name or number.
  4. Complete any other entries that apply.

The calculated allowable expenses will print on Schedule E, line 28, column (i) for nonpassive activities, or column (g) for passive activities that are not required to file Form 8582. See the IRS Instructions for Schedule SE for additional guidance.

Lacerte Tax

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