Target Allocations - Who Drafted this Circular, Non-Sensical Provision andHow Am I Supposed to Allocate Profits and Losses?

OL061-16  |  On Demand  |  Update  |  Self-Study


More and more operating and partnership agreements use target capital accounts, instead of the waterfall or layer-cake approach, to allocate profits and losses. Target allocation provisions can seem circular and very confusing to apply in practice. This session will unpack the language commonly seen in target allocations and provide an easy step-by-step methodology you can use to determine how much profit or loss to allocate each member or partner.


Number of Credits Type of Credits
1 Tax







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Brian S. Masterson, JD, LLM, CPA

Brian Masterson is a member of the accounting faculty in the College of Business at Lipscomb University and is a tax attorney in Butler Snow LLP’s Business Services practice group. Brian has significant experience in the areas of corporate and partnership taxation, mergers & acquisitions and commercial transactions. 

During his legal career, he has served a wide variety of clients with respect to state and federal tax planning, tax controversy matters, mergers and acquisitions, and structuring strategic business relationships, such as joint ventures and partnerships, and represented public, closely-held and venture-financed companies, REITs, REMICs, partnerships, limited liability companies and sole proprietors.

In addition to Brian’s teaching responsibilities at Lipscomb and legal practice at Butler Snow LLP, he is an adjunct professor at the Georgetown University Law Center in Washington, where he co-teaches with Stef Tucker a course entitled “Tax Planning for Real Estate Transactions” each fall in the LL.M. program.

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