Snapshop and Timebased Allocations

Vincent on

Hi:

I've been reading about tax allocation methods, and my
current impression is that the more commonly used methods
accepted by the IRS are the Layered and Aggregate methods.

(http://www.aicpa.org/pubs/taxadv/online/aug2003/clinic7.htm)

I was wondering if anybody knew if the Snapshop and
Timebased allocation methods supported by Bivio relate to
Layered/aggregate methods, and what the differences are?

Thanks much!

Vincent

iras1 on

Nowhere in the cited article does it state that these are "more commonly used", only that they are allowable. The timebased allocation method is similar to the Exhibit 1 analysis. I'll defer to the CPAs among us, but the supposed inequity is only temporary. It is resolved when each partner leaves the partnership. At that point, the gain/loss on withdrawal soaks up any inequity between book capital value and tax capital value.

Ira Smilovitz

In a message dated 01/15/09 15:03:28 Eastern Standard Time, bigvinnie@bivio.com writes:

I've been reading about tax allocation methods, and my
current impression is that the more commonly used methods
accepted by the IRS are the Layered and Aggregate methods.

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