[weneedtopass]

Good evening guys.

According to my resources, guaranteed payments are reported by partners for the year in which the end of the partnership fiscal year occurs.

For example. 9/1/11 – 8/31/12. 2011 monthly guaranteed payments of $1000 & 2000/mo in 2012.

Income of $20,000 should be picked up on individual’s 2012 tax return.

I’m having trouble understanding this because a fiscal year partnership of 9/1/11 – 8/31/12 should be reported on a 2011 partnership tax return. Wouldn’t the $20,000 be on the 2011 K-1 hence individual’s 2011 individual tax return?

Thanks in advance for your help!

[Anonymous]

according to IRS Pub 541, guaranteed payment is recognized to a partner in the year when the partnership's fiscal year ends; that means if a partnership ends 2012, the partner who receives the guaranteed payment will recognize the payments in 2012.

[Author]

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