You can have shifting allocations in an LLC (partnership). Like mentioned, what

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Dec 14, 2024
9:26:06am

JB2JH All-American

You can have shifting allocations in an LLC (partnership). Like mentioned, what

are the allocations per the partnership agreement? You can amend the agreement, but that has to be done by 3/15/2025 to be in effect for the 2024 tax year.

Look into substantial economic effect. This is a good resource-
https://www.taxlawforchb.com/2016/02/partnership-tax-allocations-follow-the-economics/#:~:text=In%20general%2C%20the%20determination%20of,the%20allocation%20must%20be%20substantial.

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JB2JH

Previous username: Cougarmayn
Bio page: JB2JH
Joined: Oct 27, 2007
Last login: Dec 14, 2024
Total posts: 1,626 (0 FO)

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Messages

Author

Time

Tax question I don’t know the answer for and not sure where to look

Acorn

9:15am

You know that you’re the guy we turn to with these types of questions, right?

TwinsRight

9:16am

Love to help people but this one is a bit out of my range. Tricky question that

Acorn

10:37am

I don’t see what the problem would be but would ask an accountant ultimately.

9:19am

What does the partnership agreement say? Also have to consider self employment

Chester Copperpot

9:19am

This

Taxrulz

10:18am

Partnership agreement can be amended. Both are subject to identical self

Acorn

10:47am

They might not be subject to the same SE taxes based on the wages of the

Chester Copperpot

11:52am

This isn’t my first rodeo. Thanks for the second paragraph.

Acorn

1:20pm

You can have shifting allocations in an LLC (partnership). Like mentioned, what

JB2JH

9:26am

If the individual receiving the additional income is also going to receive

JB2JH

9:33am

Agree. Partnership can allocate as they wish but it needs to reflect the actual

citron

9:40am

This can be covered based on reported time spent time spent

Acorn

10:35am

Are you saying the lower tax bracket partner would receive the taxable income

JB2JH

10:53am

You can if you want to spend some time in Sing Sing.

TeeKaa

11:09am

I didn’t ask him how they would true up the balance. The only way I could think

Acorn

1:14pm

Only 50k? Pretty small $ to be messing around with special allocations and

citron

12:14pm

Understood. They’re bootstrapping everything right now and if they could save

Acorn

1:23pm

Great stuff. Thanks for the link. I will read it.

Acorn

10:44am

Yes the IRS cares about allocations

TeeKaa

9:53am

This is good advice

Taxrulz

10:23am

Exactly. From this slightly above average run of the mill CPA…me

Acorn

10:43am

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