1065-US: Using the proration or interim closing of books methods (FAQ)

Alerts and notices

Question

How do I know if UltraTax CS is using the proration method or the interim closing of books method to distribute amounts to partners?

Answer

If there is a change of ownership during the tax year, UltraTax CS displays an FYI diagnostic that alerts you to the current method used to allocate amounts to partners.

  • If an item has been specially allocated, UltraTax CS will use the special allocation to distribute the amount to the partners.
  • If an item has not been specially allocated, UltraTax CS will distribute the item using either the interim closing of books method or the proration method.
    • If data exists in any field in which you can enter data in the Interim Closing Annualization window, UltraTax CS will use the interim closing of books method to distribute all non-specially allocated amounts to the partners.
    • If no data exists in any field in which you can enter data in the Interim Closing Annualization window, UltraTax CS will use the proration method to distribute all non-specially allocated amounts to the partners.

For more information, see Distributing amounts to partners using the proration method and Distributing amounts to partners using the interim closing of books method.

Related topic: Allocating partnership items to partners FAQs (1065)