2.26 Ark. Code R. 51-405(a)

Current through Register Vol. 49, No. 10, October, 2024

Rule 2.26-51-405(a) - Distributive Share of Partnership Income

The distributive share of the net income of the partnership which a partner is required to include in his return is his proportionate share of the net income of the partnership, either:

(a) For the taxable year upon the basis of which the partner's net income is computed, or

(b) If the partner's net income is computed upon the basis of a taxable year different from that upon the basis of which the net income of the partnership is computed, for the taxable year of the partnership ending within the taxable year upon the basis of which the partner's net income is computed.

Amounts earned and distributed to a partner by a partnership after the end of its taxable year and before the end of his corresponding taxable year should be accounted for both by the partnership and by the partner in their returns for their next succeeding taxable year. Where the results of partnership operation is a net loss, the loss will be divisible by the partners in the same proportion as net income would have been divisible (or, if the partnership agreement provides for the division of a loss in a manner different from the division of a gain, in the manner so provided), and may be taken by the individual partners in their returns of income.

2.26 Ark. Code R. 51-405(a)