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Tax Glossary
What Is a “Section 704(b) Capital Account”?
A Section 704(b) capital account is a specialized financial record used by partnerships and multi-member LLCs to track each partner’s...
Tax Glossary
What Is “Built-in Loss”?
A built-in loss is the drop in value an asset experiences before a major tax event or business transition, even...
Tax Glossary
What Is “Built-in Gain”?
A built-in gain is the hidden, unrealized profit attached to an asset that increased in value before a major transition,...
Tax Glossary
What Is a “Partnership contribution”?
A partnership contribution is an asset—such as cash, services, or physical property—that an owner puts into a partnership or multi-member...
Tax Glossary
What Is a “Liquidating distribution”?
A liquidating distribution is a final payout of cash or property from a business to an owner that completely terminates...
Tax Glossary
What Is a “Current distribution”?
A current distribution (also known as a non-liquidating distribution) is a transfer of cash or property from a business to...
Tax Glossary
What Is a “Partnership distribution”?
A partnership distribution is a transfer of cash or physical property from a business to one of its partners or...
Tax Glossary
What Is a “Book capital account”?
A book capital account is a financial record that tracks a partner’s or LLC member’s true economic equity in a...
Tax Glossary
What Is a “Tax capital account”?
A tax capital account is a financial record that tracks a partner’s or LLC member’s equity in a business using...
Tax Glossary
What Is a “Capital account”?
A capital account is a financial and tax record that tracks a partner’s or owner’s equity in a business, typically...