Targeted allocations. For those in private equity tax, is there a quick way to determine the plug (i.e. taxable income or loss) across several hundred investors? I can do it with 10 or less by simply tweaking the plugs, but it can get very cumbersome and time consuming.

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What BDO 1 said. It’s a formula plug between partially adjusted capital and ending capital (need to account for contributions and distributions in the CY, not just beginning capital). If your waterfall is particularly complex, the client likely maintains this and you can just plug the ending capital in to compute.

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I wouldn’t say CY contributions are causing a modification to this except if they were disproportionate and required a 704(c) adjustment to capital, but I guess to your point, there could be more complexity.

Doesn't RSM have some fancy partnership tech to help?

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iPACS runs both target and waterfall.

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Not sure if this is what you’re looking for, but: 1) calculate partnership totals to determine ending capital, 2) divvy up the ending capital by running the total through the waterfall, and 3) each partner tax income/loss is a formula that takes the difference between beginning and ending capital. Not sure it gets quicker than that!

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Isn’t your waterfall model and allocation schedule linked?

Hmm…is this a new client or existing? Could you leverage a previous waterfall model from a prior period and plug in your new inputs (assuming you did work for said client in prior period).

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