26 U.S.C. § 736 — Payments to a retiring partner or a deceased partner’s successor in interest
submitted 72 years ago by ch. 736 to r/title-26-INTERNAL-REVENUE-CODE · 257 words · no verdicts yet
A translation hasn’t been published for this section yet. The official text below is complete and authoritative.
Payments made in liquidation of the interest of a retiring partner* or a deceased partner shall, except as provided in subsection (b), be considered—
as a distributive share to the recipient of partnership* income if the amount thereof is determined with regard to the income of the partnership, or
as a guaranteed payment described in section 707(c) if the amount thereof is determined without regard to the income of the partnership.
Payments made in liquidation of the interest of a retiring partner or a deceased partner shall, to the extent such payments (other than payments described in paragraph (2)) are determined, under regulations prescribed by the Secretary*, to be made in exchange for the interest of such partner in partnership property, be considered as a distribution by the partnership and not as a distributive share or guaranteed payment under subsection (a).
For purposes of this subsection, payments in exchange for an interest in partnership property shall not include amounts paid for—
unrealized receivables* of the partnership (as defined in section 751(c)), or
good will of the partnership, except to the extent that the partnership agreement provides for a payment with respect to good will.
Paragraph (2) shall apply only if—
capital is not a material income-producing factor for the partnership, and
the retiring or deceased partner was a general partner in the partnership.
Source credit: (Aug. 16, 1954, ch. 736, 68A Stat. 248; Pub. L. 94–455, title XIX, § 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1834; Pub. L. 95–600, title VII, § 701(u)(13)(B), Nov. 6, 1978, 92 Stat. 2918; Pub. L. 103–66, title XIII, § 13262(a), (b)(2)(B), Aug. 10, 1993, 107 Stat. 541.)
- 1954Enacted · Act of Aug. 16, 1954, ch. 736
- 1976Amended · Pub. L. 94-455 · 90 Stat. 1834
- 1978Amended · Pub. L. 95-600 · 92 Stat. 2918
- 1993Amended · Pub. L. 103-66 · 107 Stat. 541
A history note hasn’t been published yet. The record shows enactment by ch. 736 on 1954-08-16.
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