
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: 26USC773]

 
                     TITLE 26--INTERNAL REVENUE CODE
 
                        Subtitle A--Income Taxes
 
                  CHAPTER 1--NORMAL TAXES AND SURTAXES
 
                 Subchapter K--Partners and Partnerships
 
         PART IV--SPECIAL RULES FOR ELECTING LARGE PARTNERSHIPS
 
Sec. 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--
            (A) the items described in section 772(a) shall be 
        separately stated, and
            (B) the modifications of subsection (b) shall apply.

                            (2) Elections

        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).
                (ii) Sections 49 and 465 (relating to at risk 
            limitations).
                (iii) Section 469 (relating to limitation on passive 
            activity losses and credits).
                (iv) Any other provision specified in regulations.

               (4) Coordination with other provisions

        Paragraphs (2) and (3) shall apply notwithstanding any other 
    provision of this chapter other than this part.

(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

        In determining the amount allowable under section 170, the 
    limitation of section 170(b)(2) shall apply.

                  (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--
        (1) such income shall be excluded in determining the amounts 
    referred to in section 772(a), and
        (2) in determining the income tax of any partner of such 
    partnership--
            (A) such income shall be treated as an item required to be 
        separately taken into account under section 772(a), and
            (B) the provisions of section 108 shall be applied without 
        regard to this part.

(Added Pub. L. 105-34, title XII, Sec. 1221(a), Aug. 5, 1997, 111 Stat. 
1004.)

                  Section Referred to in Other Sections

    This section is referred to in sections 772, 774, 776 of this title.
