Some initial thoughts:
- The overriding mechanics of partnership allocations is that they must either be in accordance with the very complicated substantial economic effect regulations or based on the partner's interest in the partnership (PIP).
- There are some missing pieces of information
- What is the intent behind Member A covering the expenses?
- Is this a loan? If 'yes", this should be put into writing and a fair interest rate charged
- Is this a capital contribution?
- If a capital contribution, will Member A receive an increase in ownership?
- Having a better understanding of the above will help in providing some guidance on how to complete your tax return.
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*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.
