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Unreimbursed partnership expenses can be deducted on schedule E page 2 as a loss and therefore offset some of the income from the K-1. Enter the original K-1 on line 28A and then on line 28B, enter the name of the partnership with a notation of (UPE) and enter it as if it were another K-1 with a loss. You will also need to check the "yes" box on line 27.