FAQ 522: Budget--Forfeitures not used to reduce in partnership/sole prop calculation?


The online help says that you cannot have forfeitures reduce on a partnership/sole prop case when your're running the budget routine. Some recent printed documentation does not mention this. So, can you have forfeitures reduce or not and if not, why?


No, you cannot have forfeitures reduce in the partnership/sole prop budget routine for any source that the budget routine is calculaing. We blocked it after a debate with clients and internally on how it should work within the income calculations. There is no clear guidance and offices are not consistent in what they are doing. (Are forfeitures applied to staff expense or partner expense in the income calculation, or prorated on some basis? What if forfeitures are greater than the contribution for staff or partner or all? What if they are greater in one source, but there is another source it could offset?) Most clients, when asked, aren't even sure what they do. In the end, we just decided rather than make a guess at what might be okay, we would block it. Clients can do it by hand if they wish. Or, the easiest option is to just reallocate the forfeitures prorata and reduce the requested budget contribution by the forfeiture amount, although we recognize this may not produce the exact same contribution when doing an a4 design.