Definition:
Distributive share refers to the allocation of income, loss, deduction, or credit from a business to a partner. The allocation of distributive share is usually determined by the partnership agreement, which includes the percentage share of all partners, totaling 100%.
Since a limited liability company (LLC) with more than one member files a partnership tax return, distributive share also applies to LLC members.
For example, if there are three partners in a partnership, one might have a 30 percent share, another a 50 percent share, and the third a 20 percent share. Income would then be distributed among the partners based on their share.
