United States Code (Last Updated: May 24, 2014) |
Title 26. INTERNAL REVENUE CODE |
SubTitle A. Income Taxes |
Chapter 1. NORMAL TAXES AND SURTAXES |
SubChapter K. Partners and Partnerships |
Part I. DETERMINATION OF TAX LIABILITY |
§ 702. Income and credits of partner
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(a) General rule In determining his income tax, each partner shall take into account separately his distributive share of the partnership’s— (1) gains and losses from sales or exchanges of capital assets held for not more than 1 year, (2) gains and losses from sales or exchanges of capital assets held for more than 1 year, (3) 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), (4) charitable contributions (as defined in section 170(c)), (5) dividends with respect 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 and to possessions of the United States, (7) other items of income, gain, loss, deduction, or credit, to the extent provided by regulations prescribed by the Secretary, and (8) taxable income or loss, exclusive of items requiring separate computation under other paragraphs of this subsection. (b) Character of items constituting distributive share 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.
(c) Gross income of a partner 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.
(d) Cross reference For rules relating to procedures for determining the tax treatment of partnership items see subchapter C of chapter 63 (section 6221 and following).
Amendments
2003—Subsec. (a)(5). Pub. L. 108–27 amended par. (5) generally. Prior to amendment, par. (5) read as follows: “dividends with respect to which there is a deduction under part VIII of subchapter B,”.
1986—Subsec. (a)(5). Pub. L. 99–514 amended par. (5) generally. Prior to amendment, par. (5) read as follows: “dividends or interest with respect to which there is an exclusion under section 116 or 128, or a deduction under part VIII of subchapter B,”.
1984—Subsec. (a)(1), (2). Pub. L. 98–369 substituted “6 months” for “1 year”, applicable to property acquired after
1983—Subsec. (a)(5). Pub. L. 97–448 substituted “an exclusion under section 116 or 128,” for “provided an exclusion under section 116 or 128”.
1982—Subsec. (d). Pub. L. 97–248 added subsec. (d).
1981—Subsec. (a)(5). Pub. L. 97–34, § 301(b)(6)(C), inserted reference to “interest” in heading and text which continued the amendment made by Pub. L. 96–223.
Pub. L. 97–34, § 301(b)(5), inserted “or 128” after “section 116”.
1980—Subsec. (a)(5). Pub. L. 96–223 inserted “or interest” after “dividends”.
1976—Subsec. (a)(1), (2). Pub. L. 94–455, § 1402(b)(2), provided that “9 months” would be changed to “1 year”.
Pub. L. 94–455, § 1402(b)(1)(L), provided that “6 months” would be changed to “9 months” for taxable years beginning in 1977.
Subsec. (a)(7) to (9). Pub. L. 94–455, §§ 1901(b)(1)(I)(i), 1906(b)(13)(A), redesignated pars. (8) and (9) as (7) and (8), respectively, and in par. (7), as so redesignated, struck out “or his delegate” after “Secretary”. Former par. (7), which related partially tax-exempt interest on obligations of the United States or its instrumentalities, was struck out.
Subsec. (b). Pub. L. 94–455, § 1901(b)(1)(I)(ii), substituted “paragraphs (1) through (7)” for “paragraphs (1) through (8)”.
1964—Subsec. (a)(5). Pub. L. 88–272 struck out “a credit under section 34,” before “an exclusion”.
Effective Date Of Amendment
Amendment by Pub. L. 108–27 applicable, except as otherwise provided, to taxable years beginning after
Amendment by Pub. L. 99–514 applicable to taxable years beginning after
Amendment by Pub. L. 98–369 applicable to property acquired after
Amendment by Pub. L. 97–448 effective, except as otherwise provided, as if it had been included in the provision of the Economic Recovery Tax Act of 1981, Pub. L. 97–34, to which such amendment relates, see section 109 of Pub. L. 97–448, set out as a note under section 1 of this title.
Amendment by Pub. L. 97–248 applicable to partnership taxable years beginning after
Amendment by section 301(b)(5) of Pub. L. 97–34 applicable to taxable years ending after
Amendment by Pub. L. 96–223 applicable with respect to taxable years beginning after
Pub. L. 94–455, title XIV, § 1402(b)(1),
Pub. L. 94–455, title XIV, § 1402(b)(2),
Amendment by section 1901(b)(1)(I)(i), (ii) of Pub. L. 94–455 effective for taxable years beginning after
Amendment by Pub. L. 88–272 applicable with respect to dividends received after