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PDtax, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 4027
Experience:  35 years tax experience, including four years at a Big 4 firm.
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My wife and I are partners in my composing business which is

Customer Question

My wife and I are partners in my composing business which is run out of our home. We each get a K-1 from the partnership with a larger portion of income going to me in the form of guaranteed payments for the composition work. My question is: how do we distribute UPE expenses for use of the home between us on Schedule E? This matters because UPE expenses affect each of our SE incomes, which in turn affect the SEP deductions each of us can take. Thanks in advance, -Peter
JA: The Accountant will know how to help. Is there anything else important you think the Accountant should know?
Customer: Partnership is a CA LLC
Submitted: 27 days ago.
Category: Tax
Expert:  PDtax replied 27 days ago.

Hi from just answer. I'mCustomer I'll assist.

Expert:  PDtax replied 27 days ago.

The standard response is a split of the total based on ownership percentages. Two 50-50 partners each get half of the expenses, etc.

The only adjustment I would make is if the two partners have different duties and are allocating expenses specific to one's duties. A partner who manages the sales effort and is on the road should be allocated their UPE travel expenses, for example. The other partner who is not on the road should not get an allocation of those expenses.

The specifics of your business and those expenses should dictate.

Thanks for asking at just answer. Positive feedback is appreciated when I have addressed your questions. I'mCustomer

Expert:  PDtax replied 26 days ago.

Hi again.Customerhere.

Today is our month end, and we are being asked to try and complete open questions today.

Please advise if you need anything further, or if you can rate my assistance to close out your request. Thanks. Customer/p>

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