Capital Accounts

TAX JOURNAL ARTICLE ABOUT MAINTAINING CAPITAL ACCOUNTS

Even LLC lawyers who never handle tax matters should have at least a basic understanding of partnership taxation, since this is the federal tax regimen that governs most multi-member LLCs.  In particular, they should have a basic understanding of how to maintain the capital accounts of members of multi-member LLCs taxable as partnerships.  A friend […]

NEW ARTICLE ON CAPITAL ACCOUNTS

The capital account provisions in the operating agreements of LLCs taxable as partnerships are critical both in defining the economic deal among the members and in defending this deal if challenged by the IRS upon audit.  Donald J. Weidner, Dean and Alumni Centennial Professor, Florida State University College of Law, has just published an article […]

Target Capital Accounts

Most well-drafted LLC operating agreements provide for allocations of LLC profits and losses to the members and distributions to them of LLC cash and other assets on the basis of “layer-cake” provisions—i.e. a “layer” consisting of specific provisions making these allocations and a separate layer consisting of provisions for interim and liquidating distributions based on […]