![]() If the partnership agreement fails to meet either of these two, a partner’s “interest in the partnership” determines his share of partnership items. ![]() The partnership agreement determines each partner’s share of partnership items, provided it meets two requirements- the agreement must provide for allocation, and the allocation must have substantive economic effect. Surkin, JD, LLM addresses the prior rule, why the IRS wasn’t happy, the change they wanted, how to process the transition, and the need to maintain both the former capital account and the IRS-prescribed method. The IRS directed partnerships to report capital accounts on the tax basis starting in 2020. ![]() This article originally appeared in the April 2022 TaxStringer, a publication of the New York State Society of Certified Public Accountants. Tax Basis Reporting Calculations and Analysis
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