Is partnership profit taxed even if it remains in the business?
pointedstick
Member Posts: 1 Newcomer
In a partnership/multi-member LLC where profit is allocated proportionally to partners/members, is all such profit taxed even if a partner/member elects to keep it in the business and not withdraw it?
Pretty sure yes, but would like confirmation.
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Best Answer
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Partnership income is taxed in the year that it is earned and is not dependent on when you actually take the money home or withdraw it for the partnership account. All profit/income amounts from the partnership for the year should be reported to you on your K-1, then that profit/income will pass through to your individual return and be taxable to you.
