26 U.S.C. § 761 — Terms defined

Page 1890 TITLE 26—INTERNAL REVENUE CODE § 753 ‘‘(b) REGULATIONS.—In amending the regulations pre- scribed under section 752 of such Code to reflect sub- section (a), the Secretary of the Treasury or his dele- gate shall prescribe regulations relating to liabilities, including the treatment of guarantees, assumptions, indemnity agreements, and similar arrangements.’’ § 753. Partner receiving income in respect of de- cedent The amount includible in the gross income of a successor in interest of a deceased partner under section 736(a) shall be considered income in respect of a decedent under section 691. (Aug. 16, 1954, ch. 736, 68A Stat. 251.) § 754. Manner of electing optional adjustment to basis of partnership property If a partnership files an election, in accord- ance with regulations prescribed by the Sec- retary, the basis of partnership property shall be adjusted, in the case of a distribution of prop- erty, in the manner provided in section 734 and, in the case of a transfer of a partnership inter- est, in the manner provided in section 743. Such an election shall apply with respect to all dis- tributions of property by the partnership and to all transfers of interests in the partnership dur- ing the taxable year with respect to which such election was filed and all subsequent taxable years. Such election may be revoked by the partnership, subject to such limitations as may be provided by regulations prescribed by the Secretary. (Aug. 16, 1954, ch. 736, 68A Stat. 251; Pub. L. 94–455, title XIX, § 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1834.) Editorial Notes AMENDMENTS 1976—Pub. L. 94–455 struck out ‘‘or his delegate’’ after ‘‘Secretary’’ wherever appearing. § 755. Rules for allocation of basis (a) General rule Any increase or decrease in the adjusted basis of partnership property under section 734(b) (re- lating to the optional adjustment to the basis of undistributed partnership property) or section 743(b) (relating to the optional adjustment to the basis of partnership property in the case of a transfer of an interest in a partnership) shall, except as provided in subsection (b), be allo- cated— (1) in a manner which has the effect of re- ducing the difference between the fair market value and the adjusted basis of partnership properties, or (2) in any other manner permitted by regula- tions prescribed by the Secretary. (b) Special rule In applying the allocation rules provided in subsection (a), increases or decreases in the ad- justed basis of partnership property arising from a distribution of, or a transfer of an interest at- tributable to, property consisting of— (1) capital assets and property described in section 1231(b), or (2) any other property of the partnership, shall be allocated to partnership property of a like character except that the basis of any such partnership property shall not be reduced below zero. If, in the case of a distribution, the adjust- ment to basis of property described in paragraph (1) or (2) is prevented by the absence of such property or by insufficient adjusted basis for such property, such adjustment shall be applied to subsequently acquired property of a like character in accordance with regulations pre- scribed by the Secretary. (c) No allocation of basis decrease to stock of corporate partner In making an allocation under subsection (a) of any decrease in the adjusted basis of partner- ship property under section 734(b)— (1) no allocation may be made to stock in a corporation (or any person related (within the meaning of sections 267(b) and 707(b)(1)) to such corporation) which is a partner in the partnership, and (2) any amount not allocable to stock by reason of paragraph (1) shall be allocated under subsection (a) to other partnership prop- erty. Gain shall be recognized to the partnership to the extent that the amount required to be allo- cated under paragraph (2) to other partnership property exceeds the aggregate adjusted basis of such other property immediately before the al- location required by paragraph (2). (Aug. 16, 1954, ch. 736, 68A Stat. 252; Pub. L. 94–455, title XIX, § 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1834; Pub. L. 108–357, title VIII, § 834(a), Oct. 22, 2004, 118 Stat. 1592.) Editorial Notes AMENDMENTS 2004—Subsec. (c). Pub. L. 108–357 added subsec. (c). 1976—Subsecs. (a), (b). Pub. L. 94–455 struck out ‘‘or his delegate’’ after ‘‘Secretary’’ wherever appearing. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 2004 AMENDMENT Pub. L. 108–357, title VIII, § 834(b), Oct. 22, 2004, 118 Stat. 1592, provided that: ‘‘The amendment made by this section [amending this section] shall apply to dis- tributions after the date of the enactment of this Act [Oct. 22, 2004].’’ PART III—DEFINITIONS Sec. 761. Terms defined. § 761. Terms defined (a) Partnership For purposes of this subtitle, the term ‘‘part- nership’’ includes a syndicate, group, pool, joint venture, or other unincorporated organization through or by means of which any business, fi- nancial operation, or venture is carried on, and which is not, within the meaning of this title, a corporation or a trust or estate. Under regula- tions 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— Page 1891 TITLE 26—INTERNAL REVENUE CODE § 761 (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 sell- ing services or property produced or extracted, or (3) by dealers in securities for a short period for the purpose of underwriting, selling, or dis- tributing a particular issue of securities, if the income of the members of the organiza- tion may be adequately determined without the computation of partnership taxable income. (b) Partner For purposes of this subtitle, the term ‘‘part- ner’’ 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 re- spect to such interest shall be determined with- out 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 part- nership return for the taxable year (not includ- ing 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 ‘‘liq- uidation of a partner’s interest’’ means the ter- mination of a partner’s entire interest in a part- nership 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 adjust- ment to basis of partnership property), and (3) any other provision of this subchapter specified in regulations prescribed by the Sec- retary, 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 con- ducted 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, deduc- tion, 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 ven- ture involving the conduct of a trade or busi- ness 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) with- out 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, liq- uidation, 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), title XIX, § 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1548, 1834; Pub. L. 96–222, title I, § 102(a)(2)(C), Apr. 1, 1980, 94 Stat. 208; Pub. L. 98–369, div. A, title I, § 75(b), July 18, 1984, 98 Stat. 594; Pub. L. 99–514, title XVIII, § 1805(c)(2), Oct. 22, 1986, 100 Stat. 2810; Pub. L. 110–28, title VIII, § 8215(a), May 25, 2007, 121 Stat. 193; Pub. L. 114–74, title XI, § 1102(a), Nov. 2, 2015, 129 Stat. 638.) Editorial Notes AMENDMENTS 2015—Subsec. (b). Pub. L. 114–74 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.’’ 2007—Subsecs. (f), (g). Pub. L. 110–28 added subsec. (f) and redesignated former subsec. (f) as (g). 1986—Subsec. (e). Pub. L. 99–514 substituted ‘‘Dis- tributions 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 in- terest in a partnership’’ for ‘‘any distribution’’ in clos- ing provisions. 1984—Subsecs. (e), (f). Pub. L. 98–369 added subsec. (e) and redesignated former subsec. (e) as (f). 1980—Subsec. (a)(3). Pub. L. 96–222 added par. (3). 1976—Subsec. (a). Pub. L. 94–455, § 1906(b)(13)(A), struck out ‘‘or his delegate’’ after ‘‘Secretary’’. Subsec. (e). Pub. L. 94–455, § 213(c)(3)(B), added subsec. (e). Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 2015 AMENDMENT Amendment by Pub. L. 114–74 applicable to partner- ship taxable years beginning after Dec. 31, 2015, see sec- tion 1102(c) of Pub. L. 114–74, set out as a note under section 704 of this title. EFFECTIVE DATE OF 2007 AMENDMENT Pub. L. 110–28, title VIII, § 8215(c), May 25, 2007, 121 Stat. 194, provided that: ‘‘The amendments made by this section [amending this section, section 1402 of this title, and section 411 of Title 42, The Public Health and Welfare] shall apply to taxable years beginning after December 31, 2006.’’ EFFECTIVE DATE OF 1986 AMENDMENT Amendment by Pub. L. 99–514 effective, except as oth- erwise provided, as if included in the provisions of the Page 1892 TITLE 26—INTERNAL REVENUE CODE [§§ 771 to 777 Tax Reform Act of 1984, Pub. L. 98–369, div. A, to which such amendment relates, see section 1881 of Pub. L. 99–514, set out as a note under section 48 of this title. EFFECTIVE DATE OF 1984 AMENDMENT Amendment by Pub. L. 98–369 applicable to distribu- tions, sales, and exchanges made after Mar. 31, 1984, in taxable years ending after such date, see section 75(e) of Pub. L. 98–369, set out as an Effective Date note under section 386 of this title. EFFECTIVE DATE OF 1980 AMENDMENT Amendment by Pub. L. 96–222 effective, except as oth- erwise provided, as if it had been included in the provi- sions of the Revenue Act of 1978, Pub. L. 95–600, to which such amendment relates, see section 201 of Pub. L. 96–222, set out as a note under section 32 of this title. EFFECTIVE DATE OF 1976 AMENDMENT Amendment by section 213(c)(3)(B) of Pub. L. 94–455 applicable in the case of partnership taxable years be- ginning after Dec. 31, 1975, see section 213(f)(1) of Pub. L. 94–455, set out as a note under section 709 of this title. PLAN AMENDMENTS NOT REQUIRED UNTIL JANUARY 1, 1989 For 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 Pub. L. 99–514 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 Jan. 1, 1989, see section 1140 of Pub. L. 99–514, as amended, set out as a note under section 401 of this title. [PART IV—REPEALED] Editorial Notes PRIOR PROVISIONS A prior part IV, relating to effective date for sub- chapter, consisted of section 771 of this title, prior to repeal by Pub. L. 94–455, title XIX, § 1901(a)(94), Oct. 4, 1976, 90 Stat. 1780. [§§ 771 to 777. Repealed. Pub. L. 114–74, title XI, § 1101(b)(1), Nov. 2, 2015, 129 Stat. 625] Section 771, added Pub. L. 105–34, title XII, § 1221(a), Aug. 5, 1997, 111 Stat. 1002, related to application of sub- chapter to electing large partnerships. A prior section 771, act Aug. 16, 1954, ch. 736, 68A Stat. 253, related to the effective date for this subchapter, prior to repeal by Pub. L. 94–455, title XIX, § 1901(a)(94), Oct. 4, 1976, 90 Stat. 1780. Section 772, added Pub. L. 105–34, title XII, § 1221(a), Aug. 5, 1997, 111 Stat. 1002; amended Pub. L. 109–58, title XIII, § 1322(a)(3)(I), (J), Aug. 8, 2005, 119 Stat. 1012, re- lated to simplified flow-through for partners of electing large partnerships. Section 773, added Pub. L. 105–34, title XII, § 1221(a), Aug. 5, 1997, 111 Stat. 1004, related to computations of taxable income at partnership level of electing large partnerships. Section 774, added Pub. L. 105–34, title XII, § 1221(a), Aug. 5, 1997, 111 Stat. 1005; amended Pub. L. 105–206, title VI, § 6012(c), July 22, 1998, 112 Stat. 819, related to other modifications of electing large partnerships. Section 775, added Pub. L. 105–34, title XII, § 1221(a), Aug. 5, 1997, 111 Stat. 1006; amended Pub. L. 106–170, title V, § 532(c)(2)(G), Dec. 17, 1999, 113 Stat. 1930, defined ‘‘electing large partnership’’. Section 776, added Pub. L. 105–34, title XII, § 1221(a), Aug. 5, 1997, 111 Stat. 1007, related to special rules for electing large partnerships holding oil and gas prop- erties. Section 777, added Pub. L. 105–34, title XII, § 1221(a), Aug. 5, 1997, 111 Stat. 1008, related to regulations under this part. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF REPEAL Repeal applicable to returns filed for partnership tax- able years beginning after Dec. 31, 2017, with certain ex- ceptions, see section 1101(g) of Pub. L. 114–74, set out as an Effective Date note under section 6221 of this title. Subchapter L—Insurance Companies Part I. Life insurance companies. II. Other insurance companies. III. Provisions of general application. Editorial Notes AMENDMENTS 1988—Pub. L. 100–647, title I, § 1018(u)(32), Nov. 10, 1988, 102 Stat. 3592, redesignated parts III and IV as II and III, respectively, and struck out former Part II ‘‘Mu- tual insurance companies (other than life and certain marine insurance companies and other than fire or flood insurance companies which operate on basis of perpetual policies of premium deposits).’’ 1962—Pub. L. 87–834, § 8(g)(4)(A), Oct. 16, 1962, 76 Stat. 999, substituted ‘‘and certain marine insurance compa- nies and other than fire or flood insurance companies which operate on basis of perpetual policies or pre- mium deposits’’ for ‘‘or marine or fire insurance com- panies issuing perpetual policies’’ in heading of part II. PART I—LIFE INSURANCE COMPANIES Subpart A. Tax imposed. B. Life insurance gross income. C. Life insurance deductions. D. Accounting, allocation, and foreign provi- sions. E. Definitions and special rules. SUBPART A—TAX IMPOSED Sec. 801. Tax imposed. § 801. Tax imposed (a) Tax imposed A tax is hereby imposed for each taxable year on the life insurance company taxable income of every life insurance company. Such tax shall consist of a tax computed as provided in section 11 as though the life insurance company taxable income were the taxable income referred to in section 11. (b) Life insurance company taxable income For purposes of this part, the term ‘‘life insur- ance company taxable income’’ means— (1) life insurance gross income, reduced by (2) life insurance deductions. (Added Pub. L. 98–369, div. A, title II, § 211(a), July 18, 1984, 98 Stat. 720; amended Pub. L. 99–514, title X, § 1011(b)(3), Oct. 22, 1986, 100 Stat. 2389; Pub. L. 115–97, title I, §§ 13001(b)(2)(G), 13512(b)(3), 13514(b), Dec. 22, 2017, 131 Stat. 2096, 2143.) Editorial Notes PRIOR PROVISIONS A prior section 801, added Pub. L. 86–69, § 2(a), June 25, 1959, 73 Stat. 112; amended Pub. L. 87–858, § 3(a), Oct. 23, 1962, 76 Stat. 1134; Pub. L. 91–172, title I, § 121(b)(5)(B), Dec. 30, 1969, 83 Stat. 541; Pub. L. 93–406, title II,