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In allocating the years income to Partnership equity accounts I assume it is book income? Are any adjustments made to the equity accounts for tax differences? Or is it tax income that gets allocated?
Thanks!
Retained earnings is last years book net income, that is what you distribute to partners with journal entries
debit retained earnings
credit partner 1 for his share
credit partner 2 for his share
etc
@Rustler wrote:Retained earnings is last years book net income, that is what you distribute to partners with journal entries
debit retained earnings
credit partner 1 for his share
credit partner 2 for his shareetc
Thanks for answering. My question, which I guess wasn’t very clear, is do you consider tax differences when posting or is it strictly book income without regard to tax differences? Like meals for example are generally not 100% deductible for taxes. So that would give you a difference in tax income and book income.
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