I am preparing a 1065 for a H&W LLC...............all revenue and expense run through their checkbook, except for their mileage deduction which is significant.  

This is my first year for this client.   On prior year return, since the mileage was an out-of-pocket expense, it was recorded as an increase to the capital account along with the deduction.

However, it was not recorded as an increase to partnership basis on the basis worksheet........I'm thinking that it should also be recorded as an increase to basis.

I'd appreciate any insight.

Thank you.