50% split

[Alex Aycinena]

>
>
>
> ---------- Forwarded message ----------
> From: John Ralls <jralls at ceridwen.us>
> To: vincent <vincent.fortune at live.com>
> Cc: gnucash-user at lists.gnucash.org
> Date: Mon, 26 Jan 2015 08:56:55 -0800
> Subject: Re: 50% split
>
> > On Jan 25, 2015, at 4:55 PM, vincent <vincent.fortune at live.com> wrote:
> >
> > Hi, new to Gnucash. I have what I hope is a simple question.. My Partner
> > and I run a small business (tiny!)We have to file 3 returns, one for the
> > partnership and one each for ourselves. So I've done the income/expense
> > account for the partnership (our joint earnings and expenses) and its a
> > 50/50 split. I'm sure there must be a really simple way to divide
> > everything in half and allocate half the income and half the expenses to
> an
> > account in my name, and an account in her name - but I can't find a way,
> > apart from going through and transferring 50% from the partnership to my
> > account, and 50% from the partnership to her account - with every entry.
> > There must be a way, right? Thanks in advance, and step by step if you
> > could, I am unused to accounting in any case.
>
> The best approach is to leave the tax stuff out of the books and keep it
> in the tax forms. The US tax forms include schedule K-1 for reporting the
> partner’s shares of income and expense to the partners, so a US taxpayer
> (e.g. me, as I have a small real estate partnership with my brother and
> sister) would prepare those from the partnership’s books and use them to
> prepare the partner’s taxes. Those transfers don’t really have any meaning
> in the partner’s books so there’s no good reason to transfer them.
>
> Regards,
> John Ralls
>
>
>
>
>
>
> ---------- Forwarded message ----------
> From: Michael Ferrara <mferrara1 at gmail.com>
> To: "gnucash-user at gnucash.org" <gnucash-user at gnucash.org>
> Cc:
> Date: Mon, 26 Jan 2015 09:12:21 -0800
> Subject: Fwd: 50% split
> Since it sounds like you have already totalled his & hers accounts on
> paper, there is no need to split every entry to get a running total in
> GnuCash.  Simply write a closing entry for the partnership account that
> distributes the gross income (and expenses) equally among its two
> shareholders.  The distributed income (and expenses) can then reside in
> "retained earnings" accounts; one for his profit & one for her profit.  The
> account type may be equity, or it may be an income/expense account.  If you
> are feeling ambitious, you could write a closing entry containing
> income-expenses/shareholder for each month and have a nice summary at the
> end of the year.
>
> There exist ways to cull an SQL database if you need to automate this
> process for finer granularity, say to manage totals by day or week, but
> that is beyond the scope of this thread.
>
> On Sun, Jan 25, 2015 at 4:55 PM, vincent <vincent.fortune at live.com> wrote:
>
> > Hi, new to Gnucash. I have what I hope is a simple question.. My Partner
> > and I run a small business (tiny!)We have to file 3 returns, one for the
> > partnership and one each for ourselves. So I've done the income/expense
> > account for the partnership (our joint earnings and expenses) and its a
> > 50/50 split. I'm sure there must be a really simple way to divide
> > everything in half and allocate half the income and half the expenses to
> an
> > account in my name, and an account in her name - but I can't find a way,
> > apart from going through and transferring 50% from the partnership to my
> > account, and 50% from the partnership to her account - with every entry.
> > There must be a way, right? Thanks in advance, and step by step if you
> > could, I am unused to accounting in any case.
> >
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>

I'll add to these two responses in that your question implies, but doesn't
explicitly state, that you are trying to keep track of all three entities
(the partnership and the two partners) in one gnucash book of accounts
(which corresponds to one gnucash file). This should normally not be done.

Each book of accounts should correspond to one legal entity to which all
the accounts of that book apply. So in the partnership book, as mentioned
in an earlier response, the partners are typically only reflected in the
equity section of the accounts. If you use gnucash to keep track, in
addition, of you own personal accounts, that should be in a separate book
(file) with its own set of accounts. In that book, your share of the
partnership would typically be reflected as an asset and the income and
expense items that flow through the partnership to you for tax purposes
would typically be entered in total corresponding, in the US, to the
information in the K-1 (other tax jurisdictions undoubtedly have similar
documents) coming from the partnerships book. These "flow-through" income
and expense items are then included in your own income and expense
statement (and tax return) and the offsetting entry to them adjusts your
tax basis in the partnership in the asset section of you personal book of
accounts (income items increase your basis, expense and partnership
distributions decrease it).

If you use gnucash to keep track of your partners finances, that would be a
third book of accounts (file).

Alex

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