26 U.S.C. § 702 — Income and credits of partner
submitted 72 years ago by ch. 736 to r/title-26-INTERNAL-REVENUE-CODE · 292 words · no verdicts yet
A partner separately reports specified parts of the partnership’s income, gains, losses, deductions, and credits. The nature of those items is determined as if the partner received or incurred them directly, and the partner’s gross income includes the partner’s share of partnership gross income.
(a) General rule. To determine income tax, each partner* must separately take into account the partner’s distributive share of the partnership’s: (1) gains and losses from selling or exchanging capital assets held for one year or less; (2) gains and losses from selling or exchanging capital assets held more than one year; (3) gains and losses from selling or exchanging property described in section 1231; (4) charitable contributions as defined in section 170(c); (5) dividends to which section 1(h)(11) or part VIII of subchapter B applies; (6) taxes described in section 901 paid or accrued to foreign countries or United States possessions; (7) other income, gain, loss, deduction, or credit items to the extent regulations prescribed by the Secretary* provide; and (8) taxable income or loss, excluding items that another paragraph of this subsection requires to be computed separately.
(b) Character of items constituting distributive share. The nature of an item under paragraphs (1) through (7) of subsection (a) is determined as if the partner realized it directly from the source from which the partnership* realized it, or incurred it in the same way the partnership incurred it.
(c) Gross income of a partner. Whenever this title requires determining a partner’s gross income, that amount includes the partner’s distributive share of the partnership’s gross income.
(d) Cross reference. Rules for procedures that determine the tax treatment of partnership items appear in subchapter C of chapter 63, beginning with section 6221. This subsection does not otherwise state those rules.
In determining his income tax, each partner* shall take into account separately his distributive share of the partnership’s—
gains and losses from sales or exchanges of capital assets held for not more than 1 year,
gains and losses from sales or exchanges of capital assets held for more than 1 year,
gains and losses from sales or exchanges of property described in section 1231 (relating to certain property used in a trade or business* and involuntary conversions),
charitable contributions (as defined in section 170(c)),
dividends with respect to which section 1(h)(11) or part VIII of subchapter B applies,
taxes, described in section 901, paid or accrued to foreign countries and to possessions of the United States,
other items of income, gain, loss, deduction, or credit, to the extent provided by regulations prescribed by the Secretary*, and
taxable income or loss, exclusive of items requiring separate computation under other paragraphs of this subsection.
The character of any item of income, gain, loss, deduction, or credit included in a partner’s distributive share under paragraphs (1) through (7) of subsection (a) shall be determined as if such item were realized directly from the source from which realized by the partnership*, or incurred in the same manner as incurred by the partnership.
In any case where it is necessary to determine the gross income of a partner for purposes of this title, such amount shall include his distributive share of the gross income of the partnership.
For rules relating to procedures for determining the tax treatment of partnership items see subchapter C of chapter 63 (section 6221 and following).
Source credit: (Aug. 16, 1954, ch. 736, 68A Stat. 239; Pub. L. 88–272, title II, § 201(d)(7), Feb. 26, 1964, 78 Stat. 32; Pub. L. 94–455, title XIV, § 1402(b)(1)(L), (2), title XIX, §§ 1901(b)(1)(I)(i), (ii), 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1732, 1791, 1834; Pub. L. 96–223, title IV, § 404(b)(5), Apr. 2, 1980, 94 Stat. 307; Pub. L. 97–34, title III, § 301(b)(5), (6)(C), Aug. 13, 1981, 95 Stat. 270; Pub. L. 97–248, title IV, § 402(c)(1), Sept. 3, 1982, 96 Stat. 667; Pub. L. 97–448, title I, § 103(a)(4), Jan. 12, 1983, 96 Stat. 2375; Pub. L. 98–369, div. A, title X, § 1001(b)(9), (e), July 18, 1984, 98 Stat. 1011, 1012; Pub. L. 99–514, title VI, § 612(b)(5), Oct. 22, 1986, 100 Stat. 2250; Pub. L. 108–27, title III, § 302(e)(8), May 28, 2003, 117 Stat. 764.)
- 1954Enacted · Act of Aug. 16, 1954, ch. 736
- 1964Amended · Pub. L. 88-272 · 78 Stat. 32
- 1976Amended · Pub. L. 94-455 · 90 Stat. 1732, 1791, 1834
- 1980Amended · Pub. L. 96-223 · 94 Stat. 307
- 1981Amended · Pub. L. 97-34 · 95 Stat. 270
- 1982Amended · Pub. L. 97-248 · 96 Stat. 667
- 1983Amended · Pub. L. 97-448 · 96 Stat. 2375
- 1984Amended · Pub. L. 98-369 · 98 Stat. 1011, 1012
- 1986Amended · Pub. L. 99-514 · 100 Stat. 2250
- 2003Amended · Pub. L. 108-27 · 117 Stat. 764
A history note hasn’t been published yet. The record shows enactment by ch. 736 on 1954-08-16.
all 0 arguments · sorted by: best
no arguments yet — make the first case