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JCSMCT
Level 1

Partnership income- record in QBO as sales income or partner contribution?

Hi, 

We are a professional services Limited Liability Partnership, and each partner gets a distribution based income she generates via providing services to clients. In QBO, should we categorize this income as "sales income"- which it is, or as "partner contribution"- to properly track each partnership capital account?

Thank you in advance!

 

 

2 Comments 2
Rustler
Level 15

Partnership income- record in QBO as sales income or partner contribution?

What a customer pays your partnership is income

Partners do not get distributions, they take an equity draw.

 

End of the year you fill out a form 1065, that form generates a K-1 per partner showing their share of the income and expenses per the partnership agreement. That net amount increases the partner equity account and lowers retained earnings which is where QB puts last years net profit

JCSMCT
Level 1

Partnership income- record in QBO as sales income or partner contribution?

Thank you!

 

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