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What is the income distribution to partners when income is less than amounts specified in contract?

Phyllis Rotunno's Profile

She gets salary of 20K He gets 10% of 300,000 or 30K. Balance remaining at 2:1 ratio Year 1 Net Income 15,000


Topic Expert
Keith Perry
Title: Director of Global Accounting
Company: Agrinos, Inc.
(Director of Global Accounting, Agrinos, Inc.) |


This seems to largely depend on what the contracts all say, including the partnership agreement. If it is truly a partnership, and you've got guarantees that exceed disburseable income, that seems to be a significant mistake.
It *sounds* like you've got guaranteed commitments to pay a total of $50K. Normally, in a partnership or similar structure, you split up the excess, not have guaranteed payments.

That all being said, you follow the letter of the contract.




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