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Posted

I should know this, but I am having a brain freeze.  Since partners deduct their own profit-sharing contributions on their own personal returns, is the funding deadline for a partner the due of the personal return or is it the due date of the partnership return?

Thanks for any guidance.

Posted

Agree with Cuse - The deadlines are about the sponsor's tax deadline, so if the partnership itself is the sponsor, it'd make sense to tie it to that.

Posted

As long as the partnership makes the contribution by the return's due date (including any extensions), the partners are good and their deduction for the contribution, allocated in accordance with the partnership agreement, goes on their return. In some cases, if any individual partner has been overdistributed and has not in effect funded his or her contribution for the year, the partnership can treat that as a reduction of the partner's capital account.

Luke Bailey

Senior Counsel

Clark Hill PLC

214-651-4572 (O) | LBailey@clarkhill.com

2600 Dallas Parkway Suite 600

Frisco, TX 75034

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