Partnership - Distribution of Profits

[Forensicacctnt]

An LLC with two partners, 50/50 on profits/losses and net worth. Taxed as a partnership; is there a requirement that all profits generated in the year have to be distributed to each partner? If so, what is the deadline for making all distributions? Thanks!

[Lion]

The income/expense items are distributed via K-1 to each partner and their personal returns -- whether or not any cash gets distributed. The partners pay the taxes on partnership profits (unless you're in a state like CT with its crazy new laws taxing pass-through entities) but will want to leave cash in the business to operate the business, save for capital items, etc.

[TAXNJ]

An LLC with two partners, 50/50 on profits/losses and net worth. Taxed as a partnership; is there a requirement that all profits generated in the year have to be distributed to each partner? If so, what is the deadline for making all distributions? Thanks!

See The Taxbook 20-14 partnership distributions and/or Pub 541. paragraph “Partnership Distribution” page 4 for a more detailed forensic view