Which one of the following is an example of a special allocation of partnership income?
A) The partnership's capital gains and losses are shown separately on Schedule K-1.
B) Distributions from the partnership to the partner are shown on Schedule K-1 line 20.
C) The partnership agreement provides that a partner will report all charitable contributions rather than his 20% distributive share.
D) The Schedule K-1 reports each partner's share of the information they need to calculate the § 199A (qualified business income) deduction.

Question

Quizplus · Accepted Answer

Special allocations in partnerships refer to the distribution of specific items of income, gain, loss, deduction, or credit among partners in a manner that does not strictly follow their proportionate shares of the partnership's profits or losses. Option C is an example of a special allocation because it describes a situation where the partnership agreement specifies that one partner is allocated all charitable contributions, which deviates from the partner's proportional interest in the partnership (in this case, a 20% distributive share). This is a specific arrangement that overrides the default proportional distribution based on ownership percentages.

Which One of the Following Is an Example of a Special