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PostPosted: Mon Mar 07, 2005 8:30 am 
On the 2004 schedule K-1, you are required to select the method (i.e., tax basis, GAAP, Section 704(b)) used for maintaining the partner's capital accounts. Why would a LLC decide to use either method? Which is better?


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PostPosted: Mon Mar 07, 2005 8:45 am 
Because the LLC is accounted for much the same way a partnership is with member draws and investments. The most common choice is "Tax Basis". If you're a Universal Tax Student, check out Chapter 2, Module 6, of the Professional Tax Preparer Program.


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