
From the U.S. Code Online via GPO Access
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[Laws in effect as of January 2, 2001]
[Document not affected by Public Laws enacted between
  January 2, 2001 and January 28, 2002]
[CITE: 26USC761]

 
                     TITLE 26--INTERNAL REVENUE CODE
 
                        Subtitle A--Income Taxes
 
                  CHAPTER 1--NORMAL TAXES AND SURTAXES
 
                 Subchapter K--Partners and Partnerships
 
                          PART III--DEFINITIONS
 
Sec. 761. Terms defined


(a) Partnership

    For purposes of this subtitle, the term ``partnership'' includes a 
syndicate, group, pool, joint venture, or other unincorporated 
organization through or by means of which any business, financial 
operation, or venture is carried on, and which is not, within the 
meaning of this title, a corporation or a trust or estate. Under 
regulations 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--
        (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 selling services or property produced or 
    extracted, or
        (3) by dealers in securities for a short period for the purpose 
    of underwriting, selling, or distributing a particular issue of 
    securities,

if the income of the members of the organization may be adequately 
determined without the computation of partnership taxable income.

(b) Partner

    For purposes of this subtitle, the term ``partner'' means a member 
of a partnership.

(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 partnership return for the 
taxable year (not including 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 ``liquidation of a 
partner's interest'' means the termination of a partner's entire 
interest in a partnership 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 adjustment to basis of 
    partnership property), and
        (3) any other provision of this subchapter specified in 
    regulations prescribed by the Secretary,

any distribution of an interest in a partnership (not otherwise treated 
as an exchange) shall be treated as an exchange.

(f) Cross reference

            For rules in the case of the sale, exchange, liquidation, 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, 
Sec. 213(c)(3)(B), title XIX, Sec. 1906(b)(13)(A), Oct. 4, 1976, 90 
Stat. 1548, 1834; Pub. L. 96-222, title I, Sec. 102(a)(2)(C), Apr. 1, 
1980, 94 Stat. 208; Pub. L. 98-369, div. A, title I, Sec. 75(b), July 
18, 1984, 98 Stat. 594; Pub. L. 99-514, title XVIII, Sec. 1805(c)(2), 
Oct. 22, 1986, 100 Stat. 2810.)


                               Amendments

    1986--Subsec. (e). Pub. L. 99-514 substituted ``Distributions 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 interest in a partnership'' for ``any distribution'' in closing 
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, Sec. 1906(b)(13)(A), struck out 
``or his delegate'' after ``Secretary''.
    Subsec. (e). Pub. L. 94-455, Sec. 213(c)(3)(B), added subsec. (e).


                    Effective Date of 1986 Amendment

    Amendment by Pub. L. 99-514 effective, except as otherwise provided, 
as if included in the provisions of the 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 distributions, 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 otherwise provided, 
as if it had been included in the provisions 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 beginning 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 [Secs. 1101-1147 and 1171-1177] or title XVIII 
[Secs. 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.

                  Section Referred to in Other Sections

    This section is referred to in section 1031 of this title.
