I'm trading with a proprietary firm, will receive a K-1 at the end of the year. I understand that I can also deduct outside expenses as business expenses, but not sure how to do that. If I have it right the K-1 income/loss is reported on Schedule E (partnership income/loss). Where are trading business expenses deducted, Schedule E or elsewhere? I've heard some firms allow submission of expense records so they reduce taxable income on the K-1, but my firm does not offer that option. Thanks.