Ready. Set. Incorporate! https://www.readysetincorporate.com/faq-items/whats-a-tax-allocation/ Export date: Fri Mar 29 5:54:29 2024 / +0000 GMT |
What’s a Tax Allocation?A tax allocation is what happens in your tax world when you're a partner in a partnership (or a member in an LLC 1 taxed as a partnership). Partnerships 2 themselves generally are not taxed; the tax obligations are “passed through” to its partners. So you might think: well, if the partnership doesn't give (distribute) any money to me, then as a partner I don't have to pay the tax. Nice try! To ensure that Uncle Sam gets its pound of flesh, the tax rules will allocate to you, or deem a payment made to you, whether you're actually paid or not, out of the profit of the LLC (or partnership) based on your percentage interest in the LLC/partnership. That deemed payment is an allocation, and you as a partner will pay tax on that allocation, whether you receive any money or not. |
Links:
|
Post date: 2020-04-08 21:21:50 Post date GMT: 2020-04-09 04:21:50 Post modified date: 2020-04-08 21:21:50 Post modified date GMT: 2020-04-09 04:21:50 |
Export date: Fri Mar 29 5:54:29 2024 / +0000 GMT This page was exported from Ready. Set. Incorporate! [ https://www.readysetincorporate.com ] Export of Post and Page has been powered by [ Universal Post Manager ] plugin from www.ProfProjects.com |