Where to enter automobile and truck expenses (including mileage) in a partnership return

Mileage and vehicle expenses are reported differently depending on whether the partnership or partner owns the vehicle that is used for partnership business.

Partnership Owns Vehicle

There are two options:

• Use screen AUTO to enter details for vehicle expenses (starting with Drake23).

  • Make sure to select DED in the For drop list if you want the amount to carry to Form 1065.

  • Press PAGE DOWN to enter details for each vehicle on a new screen.

  • In View/Print mode, Wks Auto is generated, the amount is shown on Statement 4, and is added to the "Other deductions" line on Form 1065.

• Calculate and enter the total of all car and truck expenses directly on the DED screen in the field Automobile and truck expense. This is an override field starting in Drake23.

  • If you complete Form 4562 outside of Drake Tax and want to enter the information directly on the form for record keeping purposes, actual mileage can be entered on screen 9.

Note: You can enter the mileage for record keeping purposes, however, expenses based on the standard mileage rate and business miles are not calculated by Drake Tax in the 1065 return due to IRS guidelines detailed in Rev. Proc. 2006-49. Actual expenses must be entered for any amounts to carry.

Partner Owns Vehicle

If the partner owns the vehicle, and is being reimbursed for mileage use, then the partnership would report the reimbursed expenses on Schedule K-1 and the partner would report the deduction on their Schedule E, Form 1040 using Unreimbursed Partnership Expense (UPE). See the Schedule E Instructions and Drake Tax - 1040: Entering Unreimbursed Partnership Expenses for details.