26 U.S.C. § 761 | Terms defined

(a)

Partnership

For purposes of this subtitle, the term “partnership” includes a syndicate, group, pool, joint venture, or other unincorporated organization through or by means of which any business, financial operation, or venture is carried on, and which is not, within the meaning of this title, a corporation or a trust or estate. Under regulations the Secretary may, at the election of all the members of an unincorporated organization, exclude such organization from the application of all or part of this subchapter, if it is availed of—

(1)

for investment purposes only and not for the active conduct of a business,

(2)

for the joint production, extraction, or use of property, but not for the purpose of selling services or property produced or extracted, or

(3)

by dealers in securities for a short period for the purpose of underwriting, selling, or distributing a particular issue of securities,

if the income of the members of the organization may be adequately determined without the computation of partnership taxable income.

(b)

Partner

For purposes of this subtitle, the term “partner” means a member of a partnership. In the case of a capital interest in a partnership in which capital is a material income-producing factor, whether a person is a partner with respect to such interest shall be determined without regard to whether such interest was derived by gift from any other person.

(c)

Partnership agreement

For purposes of this subchapter, a partnership agreement includes any modifications of the partnership agreement made prior to, or at, the time prescribed by law for the filing of the partnership return for the taxable year (not including extensions) which are agreed to by all the partners, or which are adopted in such other manner as may be provided by the partnership agreement.

(d)

Liquidation of a partner’s interest

For purposes of this subchapter, the term “liquidation of a partner’s interest” means the termination of a partner’s entire interest in a partnership by means of a distribution, or a series of distributions, to the partner by the partnership.

(e)

Distributions of partnership interests treated as exchanges

Except as otherwise provided in regulations, for purposes of—

(1)

section 708 (relating to continuation of partnership),

(2)

section 743 (relating to optional adjustment to basis of partnership property), and

(3)

any other provision of this subchapter specified in regulations prescribed by the Secretary,

any distribution of an interest in a partnership (not otherwise treated as an exchange) shall be treated as an exchange.

(f)

Qualified joint venture

(1)

In general

In the case of a qualified joint venture conducted by a husband and wife who file a joint return for the taxable year, for purposes of this title—

(A)

such joint venture shall not be treated as a partnership,

(B)

all items of income, gain, loss, deduction, and credit shall be divided between the spouses in accordance with their respective interests in the venture, and

(C)

each spouse shall take into account such spouse’s respective share of such items as if they were attributable to a trade or business conducted by such spouse as a sole proprietor.

(2)

Qualified joint venture

For purposes of paragraph (1), the term “qualified joint venture” means any joint venture involving the conduct of a trade or business if—

(A)

the only members of such joint venture are a husband and wife,

(B)

both spouses materially participate (within the meaning of section 469(h) without regard to paragraph (5) thereof) in such trade or business, and

(C)

both spouses elect the application of this subsection.

(g)

Cross reference

For rules in the case of the sale, exchange, liquidation, or reduction of a partner’s interest, see sections 704(b) and 706(c)(2).

Aug. 16, 1954, ch. 736 68A Stat. 252 Pub. L. 94–455, title II, § 213(c)(3)(B)Oct. 4, 197690 Stat. 1548 Pub. L. 96–222, title I, § 102(a)(2)(C)Apr. 1, 198094 Stat. 208 Pub. L. 98–369, div. A, title I, § 75(b)July 18, 198498 Stat. 594 Pub. L. 99–514, title XVIII, § 1805(c)(2)Oct. 22, 1986100 Stat. 2810 Pub. L. 110–28, title VIII, § 8215(a)May 25, 2007121 Stat. 193 Pub. L. 114–74, title XI, § 1102(a)Nov. 2, 2015129 Stat. 638(, ; , title XIX, § 1906(b)(13)(A), , , 1834; , , ; , , ; , , ; , , ; , , .)

Editorial Notes

Amendments

Pub. L. 114–742015—Subsec. (b). inserted at end “In the case of a capital interest in a partnership in which capital is a material income-producing factor, whether a person is a partner with respect to such interest shall be determined without regard to whether such interest was derived by gift from any other person.”

Pub. L. 110–282007—Subsecs. (f), (g). added subsec. (f) and redesignated former subsec. (f) as (g).

Pub. L. 99–5141986—Subsec. (e). substituted “Distributions of partnership interests” for “Distributions” in heading, substituted “Except as otherwise provided in regulations, for purposes of” for “For purposes of” in introductory provision, and “any distribution of an interest in a partnership” for “any distribution” in closing provisions.

Pub. L. 98–3691984—Subsecs. (e), (f). added subsec. (e) and redesignated former subsec. (e) as (f).

Pub. L. 96–2221980—Subsec. (a)(3). added par. (3).

Pub. L. 94–455, § 1906(b)(13)(A)1976—Subsec. (a). , struck out “or his delegate” after “Secretary”.

Pub. L. 94–455, § 213(c)(3)(B)Subsec. (e). , added subsec. (e).

Statutory Notes and Related Subsidiaries

Effective Date of 2015 Amendment

Pub. L. 114–74Dec. 31, 2015section 1102(c) of Pub. L. 114–74 section 704 of this titleAmendment by applicable to partnership taxable years beginning after , see , set out as a note under .

Effective Date of 2007 Amendment

Pub. L. 110–28, title VIII, § 8215(c)May 25, 2007121 Stat. 194

section 1402 of this title section 411 of Title 42December 31, 2006“The amendments made by this section [amending this section, , and , The Public Health and Welfare] shall apply to taxable years beginning after .”

, , , provided that:

Effective Date of 1986 Amendment

Pub. L. 99–514 Pub. L. 98–369, div. A section 1881 of Pub. L. 99–514 section 48 of this titleAmendment by effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984, , to which such amendment relates, see , set out as a note under .

Effective Date of 1984 Amendment

Pub. L. 98–369Mar. 31, 1984section 75(e) of Pub. L. 98–369 section 386 of this titleAmendment by applicable to distributions, sales, and exchanges made after , in taxable years ending after such date, see , set out as an Effective Date note under .

Effective Date of 1980 Amendment

Pub. L. 96–222 Pub. L. 95–600 section 201 of Pub. L. 96–222 section 32 of this titleAmendment by effective, except as otherwise provided, as if it had been included in the provisions of the Revenue Act of 1978, , to which such amendment relates, see , set out as a note under .

Effective Date of 1976 Amendment

section 213(c)(3)(B) of Pub. L. 94–455Dec. 31, 1975section 213(f)(1) of Pub. L. 94–455 section 709 of this titleAmendment by applicable in the case of partnership taxable years beginning after , see , set out as a note under .

Plan Amendments Not Required Until January 1, 1989

Pub. L. 99–514Jan. 1, 1989section 1140 of Pub. L. 99–514 section 401 of this titleFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§ 1101–1147 and 1171–1177] or title XVIII [§§ 1800–1899A] of require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after , see , as amended, set out as a note under .