26 U.S. Code § 773 - Computations at partnership level
(a) General rule
(1) Taxable income
The taxable income of an electing large partnership shall be computed in the same manner as in the case of an individual except that—
All elections affecting the computation of the taxable income of an electing large partnership or the computation of any credit of an electing large partnership shall be made by the partnership; except that the election under section 901, and any election under section 108, shall be made by each partner separately.
(3) Limitations, etc.
(A) In general
Except as provided in subparagraph (B), all limitations and other provisions affecting the computation of the taxable income of an electing large partnership or the computation of any credit of an electing large partnership shall be applied at the partnership level (and not at the partner level).
(B) Certain limitations applied at partner level
The following provisions shall be applied at the partner level (and not at the partnership level):
(i) Section 68 (relating to overall limitation on itemized deductions).
(iii) Section 469 (relating to limitation on passive activity losses and credits).
(b) Modifications to determination of taxable income
In determining the taxable income of an electing large partnership—
(1) Certain deductions not allowed
The following deductions shall not be allowed:
(A) The deduction for personal exemptions provided in section 151.
(B) The net operating loss deduction provided in section 172.
(C) The additional itemized deductions for individuals provided in part VII of subchapter B (other than section 212 thereof).
(2) Charitable deductions
(3) Coordination with section 67
In lieu of applying section 67, 70 percent of the amount of the miscellaneous itemized deductions shall be disallowed.
(c) Special rules for income from discharge of indebtedness
If an electing large partnership has income from the discharge of any indebtedness—