unreimbursed partnership expense for limited partner

[tax1111]

TP is a limited partner of an real estate partnership and incurred some out of pocket business expenses. He want to deduct them on his personal return. Can he do that as an passive investor?

[Abby Normal]

If the partnership agreement says partners can be reimbursed for out of pocket expenditures, then yes.

[tax1111]

Thanks for the help!

Do you mean if partnership agreement does NOT allow reimbursement of out of pocket expenses, then the limited partner can deduct on his personal returns, right?

 

 

[Lee B]

"The incurred expenses are claimed on Schedule E when it’s deductible. If a partner was required to pay these expenses under the partnership agreement, unreimbursed ordinary and necessary partnership expenses paid on behalf of the partnership may be deducted on Schedule E as instructed on Form 1040."

It's when the Partnership Agreement requires the Partners to pay to pay certain ordinary & necessary business expenses

I am a kinda puzzled how this would apply to a limited partner and what direct expenses a limited partner would even have?

[grandmabee]

No,  I think he means the opposite.

 

[Abby Normal]

3 minutes ago, grandmabee said:

No,  I think he means the opposite.

 

No, what cbslee said is what I meant. I worded my comment clumsily.

An inactive limited partner could have some expenses for promoting the business, schmoozing customers, but not actively participating in the management or operations of the business.

[tax1111]

3 minutes ago, Abby Normal said:

No, what cbslee said is what I meant. I worded my comment clumsily.

An inactive limited partner could have some expenses for promoting the business, schmoozing customers, but not actively participating in the management or operations of the business.

Thanks for the clarification. 

If the limited partner incurred some reasonable expenses and partnership agreement allows the reimbursement but has not reimbursed those expenses, are those expenses deductible even the losses on his k1 are not allowed on his personal return?

 

[Lee B]

2 hours ago, tax1111 said:

Thanks for the clarification. 

If the limited partner incurred some reasonable expenses and partnership agreement allows the reimbursement but has not reimbursed those expenses, are those expenses deductible even the losses on his k1 are not allowed on his personal return?

 

No, you need to read my post more carefully.