We are a real estate company with passive income as a Real Estate Professional status. The company is an LLC filing a partnership tax return and the income flows to our personal tax returns with K1 statements. I am trying to figure out how to record "UPE" (unreimbursed partnership expenses) on our tax returns.
From what I understand on Schedule E on our personal tax returns, we need to write UPE on column A of line 28 as a new line/entry with the tax id and the expense amount on column f for total UPE amount. For clarity, it's listed in the instructions of the Schedule E. Also, we need to fill out form 8862 for our tax records for this expense if there ever was an audit- I believe. Is that right about the placement of this on Schedule E, and we only need form 8862 for our tax records or do they need to be filed too?
Which blanks to use on form 8862 for this situation? If you can, please explain how I would fill it out in general as well. The form has to do with passive losses; we showed a profit, with no losses carried forward. Should I use a regular amount for this deduction or any amount that is somewhat reasonable?
Other than a home office, can you think of other examples of UPE expenses? Other than an LLC, are there other types of companies, like Partnerships, that can have UPEs? For example, would this work for an LLC taxed as C corp? If so, in what document would they be listed in for a regular c corp?