Distribution of Earnings Discrepancy
A reader writes...............

I imported our club's data after doing year end distributions in the NAIC club accounting and have printed the 1065 and K-1's.  I noticed that on 4 members K-1 that the dividend , long term capital gain and misc inc/exp are different than what Naic has on the Distribution of Earnings Report for that member.  For example one member had 7.90 dividend on Naic and shows 8.50 on the bivio K-1.  Expenses on this member were 13.29 on Naic and 14.46 on bivio K-1.

Can you explain this difference?  Should I change the data on the K-1 to reflect my Naic report?

Overall the 1065 totals are the same, the difference is in how they got distributed.

In both NCA and bivio, there are two methods of allocating income and expenses - snapshot and time-based. It appears that you are using time-based in bivio and have used snapshot in NCA.

Snapshot allocates all income and expenses on the basis of ownership at the end of the year. Time-based allocates these items on the basis of ownership at the time the item of income occurred. For instance, if you realized a large gain on the sale of a stock as of May 31, time-based would allocate that gain to the members who were present at 5/31. Snapshot would allocate the gain on the basis of ownership at the end of the year. Therefore, if someone joined after 5/31, they would be allocated a portion of the gain, even though it occurred before they joined.

You can make the two programs agree by changing the method of allocation in either program. In NCA, go to Utilities>Perameters and check the box that says Time-Based. In bivio, go to Accounting>Taxes and click on Allocation Method.

You are free to choose either of the two methods. I recommend time-based.

Also is there a Distribution of Earnings report in Bivio similar to Naic's?

If you go to Accounting>Taxes and click on Allocation Method, you will have an option to click on Member Allocation Report. This will show how each item of income/expense is allocated to the members. It is not exactly similar to the NCA report, since bivio does not 'distribute' units for these income/expense items. That practice of 'distributing units' stems from a misguided attempt to mimic mutual funds, which are forced to distribute all earnings each year to their stockholders, most of whom reinvest such earnings. There is no such requirement for partnerships, and doing this exercise distorts the unit values of the club. There are signs that NCA will drop this practice in future releases.

Thank you for your questions and for using bivio.

Rip West
Saint Paul, MN