Income Accounts. An income account shall be maintained on the partnership books on behalf of each partner. Such account shall be closed to the capital account of the partner at the close of the fiscal year. As soon as practicable after the close of each fiscal year, and at such other times as the partners may decide, the income account of each partner shall be credited with that partner’s distributive share of profits with his or her share of the losses. Any losses to be debited to a partner’s income account that exceed the credit balance of such account shall be debited to that partner’s individual capital account. If, as result of debiting a partner’s individual capital account with the excess losses, his or her capital account is depleted, future profits of that partner shall be credited to his or her capital account until such depletion has been eliminated.
Appears in 4 contracts
Samples: Partnership Agreement, Partnership Agreement, Partnership Agreement
