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Partnership distribution set up
10/14/09 2:07 PM
Total Views: 73
Total Views: 73
How can I set up a partnership of 3 who will be paid a draw and divide profits quarterly with the person bring in the business getting a commission
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Answer
11/3/09 11:11 AM
I would suggest setting up an Equity Account and call it Partner's Drawing. Then I would set up 3 additional Equity accounts and make them sub-accounts of the main Partner's Drawing account. Ex: Partner's Drawing, would be the main account and then the sub-accounts would be Partner's Drawing - A. Jones, Partner's Drawing - L. Matthew, and Partner's Drawing - B. Smith. I would use their first initial and last name.
Comment
Gah. Give each partner an equity account, with sub-accounts for earnings / contributions / distributions. At least that way, you've got something that ties to the 704(b) book basis capital accounts.