Be Careful When Spending Money on Behalf of your Partnership

If you are a partner in an partnership that has multiple partners, and spend money on behalf of the partnership, then your expenditures can be deducted under 2 methods. Either you ask your partnership to reimburse you (and then the partnership deducts the expense) or you don’t get reimbursed from the partnership and you deduct the expense (called “UPE” – Unreimbursed Partner Expenses) on your personal tax return. You can only deduct UPE on your personal tax return if the partnership agreement states that those expenses WILL NOT be reimbursed by the partnership. Review your partnership agreements to see what the language is and then ask us for guidance on how best to modify it to balance the interests of the partnership/other partners/you.