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Stephen G.
Stephen G., Sr Income Tax Expert
Category: Tax
Satisfied Customers: 7198
Experience:  Extensive Experience with Tax, Financial & Estate Issues
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We made a distribution to cover Partnership LLC members

Customer Question

We made a distribution to cover Partnership LLC members taxes. What is the correct entry?
JA: The expert will know how to help. Please tell me more, so we can help you best.
Customer: I need the account the payments should be booked to.
JA: Is there anything else important you think the expert should know?
Customer: No
Submitted: 4 months ago.
Category: Tax
Expert:  Stephen G. replied 4 months ago.

Hello, my name is***** goal is to give you a complete & accurate answer. I am working on your request now & I will respond as soon as possible.

Expert:  Stephen G. replied 4 months ago.

The debit should go to each Partner's draw account; therefore the entry is to Debit "Draw" & a Credit to "Cash".

Let me know if you have any follow-up questions.

Please remember to rate my response.

Thanks very much,

Steve G.

Customer: replied 4 months ago.
The Draw is an equity account - correct?
Expert:  Stephen G. replied 4 months ago.

Sorry about the delay in responding; I was out of town yesterday.

Yes, that's correct. The draw accounts are closed to the partner's equity accounts at the end of each accounting period or year. Haven't you been using draw accounts for all partner withdrawals, except for possible partnership expense reimbursements?

Steve G.