Law Firm (partnership)

Report a law firm partnership in Schedule A, and describe what will happen to your interest in Schedule C, Part II. Report your spouse’s partnership interest and income in Schedule A only. The requirements for other financial interests that you may have in connection with the law partnership are discussed below.

Law Firm Partnership: Examples of Partnership Interests Reported on Schedule A
Law Firm Partnership: An Example of a Partnership Agreement Reported on Schedule C, Part II 

For You

Schedule A

Report a law firm partnership interest if its value was more than $1,000 at the end of the reporting period, or if it produced more than $200 in income during the reporting period.

If You Received a Partnership Share

Block A: Provide the name of the law firm. If this is the first entry in the report related to the firm, indicate that the entity is a law firm and provide the location (city and state).

Block C: Write the word “partnership share” followed by the exact amount of your partnership share, including draw and any distributions, in the column labeled “Other Income” on the right side of the page.

If You Anticipate Payment of an Outstanding Partnership Share

Block A: Provide the name of the law firm and write “partnership share (anticipated)” or “partnership share (receivable).”

Block B: Mark the column that corresponds to the value of the anticipated payment, including draw, distributions, and any other related components of your compensation.

Block C: Mark the column labeled “None (or less than $201)” since you have not yet received the payment.

Capital Account

Block A: Provide the name of the law firm and write “capital account.”

Block B: Report the value of the account by marking the appropriate column.

Block C: Report the total amount of income that was produced during the reporting period by marking the appropriate “Amount” column. If the amount of income is more than $200, you also need to report the type of income by marking the applicable “Type” column. For capital accounts, the type of income usually is “interest.”

Schedule C, Part II

You need to report how you will receive your capital account refund and any anticipated partnership share distributions in Schedule C, Part II. In addition, if you are not a career government employee but are instead a “covered noncareer” employee, you need to describe any arrangement to have your name removed from the partnership. If you are uncertain as to whether you are a “covered noncareer” employee, your ethics official can help you.

Terms: Provide the terms under which the payments will be paid, including when the payments will be fixed or the reference point for the calculations (e.g., “calculated as the date of withdrawal”); how the payments will be made (e.g., “quarterly payments” or “lump sum”); and, if possible, when the payments will be made (e.g., “over two years,” “within six months,” or “prior to assuming the duties of the position”). If the payments are being made pursuant to an established agreement or firm policy, you should note that fact in your description. In addition, if your name will be removed from the partnership, disclose the change (e.g., “partnership will be changed to ‘Faraday & Maxwell’ upon my withdrawal”).

Parties: Provide the name of the firm as well as the city and state in which the firm is located.

Date: Provide the month and year in which you entered into the agreement(s).

Other Interests in the Partnership

Compensation and Other Benefits: In addition to partnership income, you need to report any additional compensation and other benefits. Report these as separate line entries using the instructions in this guide for that type of asset or income. For example, various sections of this guide address: severance payments, bonuses, deferred compensation, defined benefit plans, defined contribution plans, and other items.

Contingency Fee Interests: If you have any interests in contingency fee cases, report these interests in Schedule A and Schedule C, Part II using the instructions provided in this guide. 

Business Assets and Liabilities: You need not report assets or liabilities that are directly related to the business. Other assets and liabilities would be reportable using the guidance applicable to that type of asset or liability.

For Your Spouse

Schedule A

The instructions for reporting a spouse’s partnership interest are the same as for reporting your own partnership interests, except when reporting earned income. In contrast to the $200 threshold for your own income, you need to report your spouse’s earned income (e.g., partnership share) if your spouse received more than $1,000 during the reporting period. In addition, you do not need to provide the actual amount of income that your spouse received. Instead, report only the type of income in the “Other Income” column (e.g., “partnership share”).

Schedule C, Part II

Do not report agreements or arrangements related to your spouse’s partnership in Schedule C, Part II.

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This guide is not intended to provide investment advice, and you should not rely on statements in this guide when making investment decisions.