Discussion:Partnership home office

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Discussion Forum Index --> Tax Questions --> Partnership home office


Hdoverby (talk|edits) said:

7 April 2006
I have a client who I just did a 1065 for a partnership he is in. Both partners use their home office for conducting business. Exactly which form should be used for these home office calculations? Since C is not used 8829 is not suppose to be used; is it 2106?

Taxea (talk|edits) said:

7 April 2006
yes, linked to the K-1

JR1 (talk|edits) said:

7 April 2006
There should be a supplemental info worksheet for the K1...but I don't think you can do HO for both these partners..

Natalie (talk|edits) said:

7 April 2006
??? Form 2106 says to use that form only if the person is an "employee." Is a partner an employee? I have a similar situation and plan on reporting the unreimbursed business expenses on page 2 of Schedule E, line 28. Pub. 587 does not make reference to Form 2106 for partners. It does refer partners to Schedule E of the 1040. Also note that unreimbursed expenses are deductible only if the partnership agreement says the partner is required to pay them.

Dennis (talk|edits) said:

8 April 2006
publication 587 worksheet is identical to 8829. I retitle the form,use a dummy Schedule C and write in the refence on UPE worksheet

Natalie (talk|edits) said:

8 April 2006
So do you verify that the partnership agreement requires the partner to pay the expenses? Also, a CPA I know wouldn't deduct any mortgage interest, RPT or insurance because he maintains those are expenses of the individual, not the partnership (even though the HO is the principal place of business). What are your thoughts Dennis?

Hdoverby (talk|edits) said:

8 April 2006
If anyone has clarity on this I would appreciate it, especially in what the proper form would be.

Dennis (talk|edits) said:

8 April 2006
The only situations I have are those where the partners doing the requiring are the partners taking the deduction. And as far as the CPA you know, bless his heart, Unreimbursed Partnership Expense is the expense of the individual. That is why it is called unreimbursed.

If I had a partnership where one of the partners used his home as the main office and didn't get anything for it I would beat them mightily with a stick. De facto unequal distribution of profits.

Hdoverby (talk|edits) said:

8 April 2006
Is the depreciation of home office used part of this?

Controller (talk|edits) said:

8 April 2006
Help! Can I tail this thread with a followup. If this is an S-corp instead, would this decidedly be form 2106 linked to the K-1? The owner is only employee and the home office is the only office available. I have never done a home office where it is not a sole prop.

JR1 (talk|edits) said:

8 April 2006
No, there is no HO form in the 1120S and it cannot be taken on the 1040. Deduct the HO expenses on the 1120S directly and you're done.

Sandysea (talk|edits) said:

8 April 2006
Ohhhh Controller....I had this item yesterday in a thread and sobeit....JR is on the money. NOOO Form 2106 on 1040 for s/h employee...no way, no way....

Controller (talk|edits) said:

8 April 2006
Thanks Sandy & JR. I actually hadn't gotten that far, but since the topic of this string was coming my way, I thought I would ask before I stuck my head in to research.

Chase (talk|edits) said:

17 April 2007
Are the home office expenses run through the S Corporation just like other expenses then? No K-1 impact?

Kevinh5 (talk|edits) said:

17 April 2007
how can expenses run through an S corp have no impact on the K-1?

Chase (talk|edits) said:

17 April 2007
What I meant was ---- just run through the ordinary income section of the 1120S....not as an additional note section of the K1. I thought you could read my mind :-)

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