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Schedule E income in a partnership

Schedule E income in a partnership

we have a partnership and among their income, there are some schedule E income where tax has been deducted at source.

I should be grateful if you would kindly let me know the best way to deal with the Schedule E income in the accounts and tax returns.

Many Thanks


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21st Jun 2011 11:39

Schedule E?

OK, I know what you mean!

Treatment in the accounts should be straightforward - the income is shown as gross with the tax deducted included in the relevant partner's drawings. How the income (and tax) is reflected in the profit shares will depend on the partnership agreement.

For tax return purposes, the taxed income should be excluded from DI profits - with corresponding adjustments to the allocation of taxable profits.

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