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Question

Why are expenses allocated proportionally higher to some income types?

Answer

By default, indirect expenses are allocated using the gross method. If there are expenses entered on the activity screens for business, rental, and farm activities, the expenses are not proportional to the net income amounts from these activities. Mark the Use net rather than gross method for allocating expenses field on Screen Allocate in the Allocations folder to change the allocation method.  

Related topics 

1041-US: Allocating indirect expenses (FAQ)

1041-US: Expense allocations FAQs

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