SPECIAL ALLOCATIONS

My understanding is that this is to be done in the partner ownership section.  I do not operate in a windows environment and TT Business is a windows only program.

Having said that, I provide the following thoughts:

• Does your operating agreement provide for special allocations
• Has your operating agreement been reviewed by a tax professional who understand partnership tax law
• Special allocations, such as the type you are discussing, are not common.
• Allocations that are not in accordance with a member's interest in the LLC MUST conform to the regulations substantial economic effect rules.  These are not for the faint of heart.
• Should you win the audit lottery, you had better be comfortable with bullet 4 and be able to support this upon audit.
• The only exception to the above, outside of the economic effect rules, would be if the member contributed property with built-in gain and the property was sold.  Here there may be a need for a special allocation to comply with Section 704(c) regulations.
• There is a real reason why this is the case as Treasury does not want members / partners shifting income, gain, losses because one member or partner may benefit from the shift.
• I recommend you consult with a tax professional who understands these complex rules before embarking down this path.