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Certain threshold issues bear mentioning here: (1) members of an LLC, or partners in a partnership which has elected to be treated as a partnership for Federal income tax purposes, may use a proportionate share of the partnership debt in order to increase their "basis" for the purpose of receiving distributions of both profits and losses; [3 ...
Gross income is sales price of goods or property, minus cost of the property sold, plus other income. It includes wages, interest, dividends, business income, rental income, and all other types of income. Adjusted gross income is gross income less deductions from a business or rental activity and 21 other specific items.
Partner C was admitted to the partnership. He paid $5,000 cash. In return, he received $9,000 equity in the partnership. A $4,000 ($9,000 - $5,000) bonus paid to Partner C would be distributed as follows: Partner A will pay ($4,000 * 75%) $3,000. His capital account will be debited $3,000. Partner B will pay ($4,000 * 25%) $1,000.
They are sometimes called Balance Day adjustments because they are made on balance day. Based on the matching principle of accrual accounting, revenues and associated costs are recognized in the same accounting period. However the actual cash may be received or paid at a different time.
In the United States, the statement of allocated income is known as a K-1 (or Schedule K-1). Depending on the local tax regulations, this structure can avoid dividend tax and double taxation because only owners or investors are taxed on the revenue. Technically, for tax purposes, flow-through entities are considered "non-entities" because they ...
These adjustments can include bad debt expenses, any legal settlements paid, costs for acquisitions, charitable contributions and salaries of the owner or family members. [9] [10] The resulting metric is called adjusted EBITDA or EBITDA before exceptionals. A negative EBITDA indicates that a business has fundamental problems with profitability.
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Distribution and service fees are fees paid by the fund out of fund assets to cover the costs of marketing and selling fund shares and sometimes to cover the costs of providing shareholder services. They are also called 12b-1 fees after section 12 of the Investment Company Act of 1940. "Distribution fees" include fees to compensate brokers and ...