Transcription of ALLOCATION OF INCOME AND LOSS - taxtaxtax.com
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ALLOCATION OF INCOME AND LOSS - taxtaxtax.com
ALLOCATION OF INCOMEAND LOSS900 A partnership is not subject to tax at the partnership level. The partnership s items of INCOME , gain, loss , deduction, and credit are determined at the partnership level, allocated among the partnersaccording to the partnership agreement, and reported to the partners on Schedule K-1 of the partnershipincome tax return (Form 1065). The partners then report these items on their own tax returns. In practice,the allocated amounts are commonly referred to as K-1 items. Technically, they are distributive shares ofpartnership In understanding the rules governing distributive shares [under IRC Sec. 704(b)], it is important torecognize that in every partnership transaction, there are (at least) two separate ALLOCATION systemsinvolved: 1.
ALLOCATION OF INCOME AND LOSS 900 INTRODUCTION 900.1 A partnership is not subject to tax at the partnership level. The partnership’s items of income, gain,
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