I 
108TH CONGRESS 
1ST SESSION H. R. 1558
To amend the Internal Revenue Code of 1986 to allow a married couple 
conducting an unincorporated trade or business to elect out of partner-
ship status. 
IN THE HOUSE OF REPRESENTATIVES 
APRIL 2, 2003
Mr. DOGGETT (for himself, Ms. DELAURO, Mr. LEWIS of Georgia, Mr. NEAL 
of Massachusetts, Mr. SANDERS, Mr. SANDLIN, and Mr. STARK) intro-
duced the following bill; which was referred to the Committee on Ways 
and Means 
A BILL 
To amend the Internal Revenue Code of 1986 to allow a 
married couple conducting an unincorporated trade or 
business to elect out of partnership status.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. ELECTION OUT OF PARTNERSHIP STATUS BY 
MARRIED COUPLE CONDUCTING AN UNIN-
CORPORATED TRADE OR BUSINESS. 
(a) IN GENERAL.—Section 761 of the Internal Rev-
enue Code of 1986 (defining terms for purposes of part-
nerships) is amended by redesignating subsection (f) as
subsection (g) and by inserting after subsection (e) the 
following new subsection: 
‘‘(f) ELECTION OUT OF PARTNERSHIP STATUS BY 
MARRIED COUPLE CONDUCTING AN UNINCORPORATED 
TRADE OR BUSINESS.—
‘‘(1) IN GENERAL.—In the case of a trade or 
business conducted by a husband and wife who file 
a joint return for the taxable year and who own all 
of the capital and profits interests of such trade or 
business, such husband and wife may elect for pur-
poses of this title that such trade or business shall 
not be treated as a partnership. 
‘‘(2) TREATMENT OF ITEMS.—
‘‘(A) IN GENERAL.—All items of income, 
gain, loss, deduction, and credit relating to a 
trade or business with respect to which an elec-
tion is made for the taxable year shall, except 
as provided in subparagraph (B), be divided 
equally between the spouses, and each spouse 
shall take into account such spouse’s respective 
share of such items as if they were attributable 
to a trade or business conducted by such spouse 
as a sole proprietor. 
‘‘(B) ALLOCATION OF SHARE BASED ON 
DIVISION
OF
LABOR.—Under regulations, the
husband and wife may provide, in lieu of the 
equal allocation of their respective shares under 
subparagraph (A), for an allocation of such 
shares based on their proportionate share of the 
work performed by such spouses in the trade or 
business. 
‘‘(3) EXCEPTION.—Paragraph (1) shall not 
apply to a trade or business which is a corpora-
tion.’’. 
(b) NET EARNINGS FROM SELF-EMPLOYMENT.—
(1) Subsection (a) of section 1402 of such Code 
(defining net earnings from self-employment) is 
amended by striking ‘‘and’’ at the end of paragraph 
(14), by striking the period at the end of paragraph 
(15) and inserting ‘‘; and’’, and by inserting after 
paragraph (15) the following new paragraph: 
‘‘(16) notwithstanding the preceding provisions 
of this subsection, each spouse’s share of income or 
loss from a trade or business with respect to which 
an election is in effect under section 761(f) shall be 
taken into account as provided in section 761(f)(2) 
in determining net earnings from self-employment of 
such spouse.’’. 
(2) Subsection (a) of section 211 of the Social 
Security Act (defining net earnings from self-em-