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.
*A reminder that posts in a forum such as this do not constitute tax advice.
Also keep in mind the date of replies, as tax law changes.
