♦ The balance in a partner's drawing account, along with the share of profits or losses, is closed out to the partner's capital account.
♦ The nature of the business a partnership is engaged in should suggest the various bases that might be appropriate for an allocation of profits or losses.
♦ The allocation of profits or losses may be based on salaries, bonuses, interest on invested capital, and/or a profit/loss percentage.
Describe how a partner's tax basis in a partnership is different from the book basis, and be able to calculate the tax basis.
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