 In this discussion, we will discuss the discussion question of how can income and loss be allocated in a partnership. So when discussing the allocation of income and loss, the easiest method is probably the best method to start with and then we can get more complex with it. The allocation of net income is one of the huge benefits that a partnership has, meaning there's a lot of flexibility for the allocation of net income. And a lot of times when we think about the partnerships, we don't really grasp how important that can be depending on the type of partnership we have. So the first allocation would be just an even split type of allocation that we can have. So if we had whatever, how many partners we have, we have 1, 2, 3, 5, 100, we can evenly split the income. So if it was two partners, 50, 50, 3, 1, 3, 1, 3, 4, 1, 4, 2 to them. And usually when we talk about partnerships with like new individuals or people that want to start a partnership, they often think that that's just the way it has to be. You know, 50, 50, or 1, 3, even split just has to be the way or otherwise it's just not fair and note that that's not necessarily, like often not the case that it's not really, you know, it's often the case that it can be fair and because it's not an even distribution. And that usually happens because like one partner might put in a lot of capital to the partnership. So if you have two partners say that are even on everything else, they're going to put in an equal amount of time and they have, you know, they're going to, they have equal knowledge in the business and whatnot. But one is putting in the capital investment to buy the equipment and the store and whatnot. Then that one individual is actually putting money on the line, whereas they're both putting time on the line. And so at the start of the business, one individual has really invested past time in the form of cash and future time in the form of time invested. And so you could argue then that that individual to put the money in should get some kind of compensation for that. And the question is, well, how can we do that? Well we could try to give one some kind of income allocation to the capital investment in order to kind of incentivize capital if the business needs capital that's unnecessary, you know, that we want to incentivize that somehow. So we could do that by saying how about we give a percentage share of the capital investment first to that individual based on beginning capital accounts, whatever they put in the business, say we give them 10% of that. So if net income was 100,000, we give 10% first to the person that put the capital investment in and then maybe we split the difference 50-50 after that 10% has been distributed. And in that way, that's one way that we can incentivize a capital investment. So that difference is one way we can do that. And we can't really do that as easily with something like a corporation which has stocks. So we can give different amount of stocks but it's not as flexible for us to say well we just want to take the capital investment and give it so much to them. It doesn't have quite as much flexibility. And then we also have a situation typically where one of two individuals put in the same amount of capital but one individual plans on spending a whole lot more time on the business. Maybe one individual is the one who basically came up with the idea for the business and whatnot and they're the ones that are going to spend all the time on it and the other person is like well I'm going to put in the capital with you but I've got other things to do and I'm not going to be spending all my time on the business. Well then how can we split that up to make it fair? And typically that way we might just allocate a salary allocation even though it has nothing to do with payroll. We might just say if the company says makes net income of $100,000 we will give a salary allocation of $30,000 or whatever to one individual kind of based on the time they're putting into the partnership. Not salaries, it's not going to have the same kind of payroll taxes to it but it's similar to salary in that we're giving a share of the profits to an individual who is working more in the business. And so that's another type of way that we can do that. We can give a salary and then whatever the difference is we can split in whatever way the profit sharing is 50-50 or whatever the other portion is. So those are combinations of those three kind of methods are typically the ways we do it. We can have just a percentage allocation whether it be an even percentage or some non-even percentage based on whatever the circumstances are. We can have some type of capital distribution investment and we can have some kind of salary type of investment and of course combinations of all those. And remember that the varying factors between those are just basically when two people go into any kind of partnership agreement, even when two people move into a new home or something or they rent an apartment together or roommates go into an apartment, the house isn't the same, the bedrooms are different, who's going to get the larger bedroom? Is it fair that they're not two different bedrooms? Well it could be fair if someone pays more money or does more of the chores or something like that, right? And so that's going to be the same for any kind of partnership agreement as well. It's not like everything has to be cut down the middle where you say well that's fine if you want to spend more time then this person wants to spend less time or you want to put more money in and this person put less money in but more time or whatever. Then we can just change the income allocation, change the deal. Feel that everybody feels that there's some balance between the commitment in terms of time and capital as well as the benefits in terms of revenue generation.