The partnership agreement might provide, for example, that the first $40,000 of ordinary income is allocated to
Partner A. Allocating income in this manner is an example of a separately stated item.

Question

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Allocating income in this manner is not an example of a separately stated item; it is an example of a special allocation of partnership income, which is different from separately stated items that must be reported individually by partners on their tax returns due to their tax treatment.

The Partnership Agreement Might Provide, for Example, That the First