
From the U.S. Code Online via GPO Access
[wais.access.gpo.gov]
[Laws in effect as of January 2, 2001]
[Document not affected by Public Laws enacted between
  January 2, 2001 and January 28, 2002]
[CITE: 26USC708]

 
                     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
 
Sec. 708. Continuation of partnership


(a) General rule

    For purposes of this subchapter, an existing partnership shall be 
considered as continuing if it is not terminated.

(b) Termination

                          (1) General rule

        For purposes of subsection (a), a partnership shall be 
    considered as terminated only if--
            (A) no part of any business, financial operation, or venture 
        of the partnership continues to be carried on by any of its 
        partners in a partnership, or
            (B) within a 12-month period there is a sale or exchange of 
        50 percent or more of the total interest in partnership capital 
        and profits.

                          (2) Special rules

        (A) Merger or consolidation

            In the case of the merger or consolidation of two or more 
        partnerships, the resulting partnership shall, for purposes of 
        this section, be considered the continuation of any merging or 
        consolidating partnership whose members own an interest of more 
        than 50 percent in the capital and profits of the resulting 
        partnership.

        (B) Division of a partnership

            In the case of a division of a partnership into two or more 
        partnerships, the resulting partnerships (other than any 
        resulting partnership the members of which had an interest of 50 
        percent or less in the capital and profits of the prior 
        partnership) shall, for purposes of this section, be considered 
        a continuation of the prior partnership.

(Aug. 16, 1954, ch. 736, 68A Stat. 244.)

                  Section Referred to in Other Sections

    This section is referred to in sections 168, 761, 774 of this title.
