At present, Simple Invest 360 does not support Partnership Entities as a unique entity type. In the meantime, we recommend Partnerships to be setup using the Trust option. For assistance with setting up a Trust, please see the Entity Setup article, as well as the article on entering opening balances for a Trust.
Why setup a Partnership as a Trust?
- The default accounts available for Trusts in the Chart of Accounts are also relevant to Partnerships.
- Other unique partnership accounts can be created as Custom Accounts.
- The Beneficiary screen can be used to add the Partners of the Partnership.
- Tax calculations that are specific to Partnerships aren't currently available in Simple Invest 360, however tax calculations that are run for a Trust can be used.
- The Partnership Tax Return has a very similar to that of a Trust. For example - The tax Reconciliation report labels for section 6, 7, 8, 9, 11, 12, 16 are the same in a partnership. Therefore you can refer to the trust tax reconciliation and Statement of taxable income report to assist with preparing a Partnership return.
Note: The calculation on these reports are trust specific. So please double check all amounts before inputting to a Partnership Tax Return to ensure it applicable for a Partnership
Distribution in a Partnership
As a Partnership will be distributing profit as well you can use the Profit Distribution screen to allocate profit to partners.
The Partners section of the tax return has similar labels to the Trust beneficiary section. So you could use the ‘autofill %’ option to calculate the tax components for each Partner and edit the amounts if required.
Note : The tax component calculations are Trust specific. So please double check all amounts before inputting to a Partnership tax return to ensure it is applicable for a Partnership.
Distributing a Loss
Since a Trust cannot distribute a loss to a Beneficiary, in scenarios where the Partnership has a loss you will not be able to split the loss among partners in the beneficiary screen.
In this scenario you can use the Distribution screen to calculate the loss and allocate it first to a Retained Earnings account. Next, manual journal entries can be posted to allocate the loss from the retained earnings account to the partners.