We investigate the extended Hubbard model as an approximation to the local and spatial entanglement of a one-dimensional chain of nanostructures where the particles interact via a long-range interaction represented by a "soft" Coulomb potential. In the process we design a protocol to calculate the particle-particle spatial entanglement for the Hubbard model and show that, in striking contrast with the loss of spatial degrees of freedom, the predictions are reasonably accurate. We also compare results for the local entanglement with previous results found using a contact interaction (Coe J. P. et al., Phys. Rev. A, 81 (2010) 052321) and show that while the extended Hubbard model recovers a better agreement with the entanglement of a long-range interacting system, there remain realistic parameter regions where it fails to predict the quantitative and qualitative behaviour of the entanglement in the nanostructure system.