Partner's Distributive Share
Allocating Income and Losses
Each partner receives a distributive share of the partnership's income, deductions, gains, losses, and credits. The allocation is generally determined by the partnership agreement, provided it complies with applicable tax rules.
Note
A partner's distributive share may differ from the amount of cash actually distributed.
Summary
Taxable partnership income is generally allocated according to ownership or agreed-upon allocation rules, not necessarily cash distributions.