You (they) have to look at their partnership operating agreement.  If that document specifies allocation then until they amend the agreement you should not oblige.  S corporations cannot have disproportionate distributions or allocations. 50/50 owners must share profits and losses as well as distributions 50/50. Any change is done through salaries.  But LLC's can have different ownership %, sharing of profits % and sharing of losses %.  And the last two can be modified every year, again, as long as their operating agreement allows.  In the K-1 Worksheet you can change the sharing of profits % and sharing of losses %, and you can also do a special allocation by $ amount or by ratio.