partnershipallocation-wakeforestuniversity-Partnership.ppt

Partnership Allocation Partnership Agreement Flexibility Allocating profits/losses Amount timing of distributions Compensation paid to partners Receipts upon liquidation Partnership Agreement Determines distributive share of income, gain, loss, deduction (§704(a)) §704(b) governs allocations where partnership agreement is silent as well as special allocations Special allocation = differ from partners’ respective interests in partnership capital Section 704(b) – In General General Rule: A partner’s income, loss, deductions, credits other items are determined in accordance with the partnership