26 CFR 7.704-1 - Partner's distributive share.

§ 7.704-1 Partner's distributive share.

(a)-(c) [Reserved]

(d)Limitation on allowance of losses. (1)-(2) [Reserved]

(3)

(i) Section 213(e) of the Tax Reform Act of 1976 amended section 704(d) of the Internal Revenue Code relating to the deductions by partners of losses incurred by a partnership. A partner is entitled to deduct the share of partnership loss to the extent of the adjusted basis of the partner's interest in the partnership. As amended, section 704(d) provides, in general, that the adjusted basis of a partner's interest in the partnership for the purpose of deducting partnership losses shall not include any portion of a partnership liability for which the partner has no personal liability. This restriction, however, does not apply to any activity to the extent that section 465 of the Code applies nor to any partnership whose principal activity is investing in real property, other than mineral property. Section 465 does not apply to corporations other than a subchapter S corporation or a personal holding company.

(ii) The restrictions in the amendment to section 704(d) will not apply to any corporate partner with respect to liabilities incurred in an activity described in section 465(c)(1). In all other respects the restrictions in the amendment will apply to all corporate partners unless the partnership's principal activity is investment in real property, other than mineral property.

[T.D. 7445, 41 FR 55344, Dec. 20, 1976]

This is a list of United States Code sections, Statutes at Large, Public Laws, and Presidential Documents, which provide rulemaking authority for this CFR Part.

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United States Code
U.S. Code: Title 26 - INTERNAL REVENUE CODE

Title 26 published on 07-Apr-2017 03:23

The following are ALL rules, proposed rules, and notices (chronologically) published in the Federal Register relating to 26 CFR Part 7 after this date.

  • 2016-12-30; vol. 81 # 251 - Friday, December 30, 2016
    1. 81 FR 96374 - Information Returns; Winnings From Bingo, Keno, and Slot Machines
      GPO FDSys XML | Text
      DEPARTMENT OF TREASURY, Internal Revenue Service
      Final regulations.
      These regulations are effective on December 30, 2016.
      26 CFR Parts 1, 7, and 31