Source: https://irc.bloombergtax.com/public/uscode/doc/irc/section_706
Timestamp: 2020-07-05 11:08:24
Document Index: 642930077

Matched Legal Cases: ['§ 706', '§ 706', '§ 706', '§ 706', '§ 706', '§ 706', '§ 706', '§ 706', '§ 706', '§ 706', '§ 706', '§ 706', '§ 706', '§ 706', '§ 706', '§ 706', '§ 706', '§ 706', '§ 706', '§ 706', '§ 706', '§ 706', '§ 706', '§ 706', '§ 706', '§ 706', '§ 706', '§ 706', '§ 706', '§ 706', '§ 706', '§ 706', '§ 706', '§ 706', '§ 706', '§ 706', '§ 706', '§ 706', '§ 706', '§ 706', '§ 706', '§ 706', '§ 706', '§ 706', '§ 706', '§ 706']

Internal Revenue Code, § 706. Taxable Years Of Partner And Partnership
I.R.C. § 706(a) Year In Which Partnership Income Is Includible —
I.R.C. § 706(b) Taxable Year
I.R.C. § 706(b)(1) Partnership's Taxable Year
I.R.C. § 706(b)(1)(A) Partnership Treated As Taxpayer —
I.R.C. § 706(b)(1)(B) Taxable Year Determined By Reference To Partners —
I.R.C. § 706(b)(1)(B)(i) —
the majority interest taxable year (as defined in paragraph (4)),
I.R.C. § 706(b)(1)(B)(ii) —
if there is no taxable year described in clause (i), the taxable year of all the principal partners of the partnership, or
I.R.C. § 706(b)(1)(B)(iii) —
if there is no taxable year described in clause (i) or (ii), the calendar year unless the Secretary by regulations prescribes another period.
I.R.C. § 706(b)(1)(C) Business Purpose —
I.R.C. § 706(b)(2) Partner's Taxable Year —
I.R.C. § 706(b)(3) Principal Partner —
I.R.C. § 706(b)(4) Majority Interest Taxable Year; Limitation On Required Changes
I.R.C. § 706(b)(4)(A) Majority Interest Taxable Year Defined —
I.R.C. § 706(b)(4)(A)(i) In General —
The term “majority interest taxable year” means the taxable year (if any) which, on each testing day, constituted the taxable year of 1 or more partners having (on such day) an aggregate interest in partnership profits and capital of more than 50 percent.
I.R.C. § 706(b)(4)(A)(ii) Testing Days —
I.R.C. § 706(b)(4)(A)(ii)(I) —
the 1st day of the partnership taxable year (determined without regard to clause (i)), or
I.R.C. § 706(b)(4)(A)(ii)(II) —
I.R.C. § 706(b)(4)(B) Further Change Not Required For 3 Years —
I.R.C. § 706(b)(5) Application With Other Sections —
I.R.C. § 706(c) Closing Of Partnership Year
I.R.C. § 706(c)(1) General Rule —
I.R.C. § 706(c)(2) Treatment Of Dispositions
I.R.C. § 706(c)(2)(A) Disposition Of Entire Interest —
I.R.C. § 706(c)(2)(B) Disposition Of Less Than Entire Interest —
I.R.C. § 706(d) Determination Of Distributive Share When Partner's Interest Changes
I.R.C. § 706(d)(1) In General —
I.R.C. § 706(d)(2) Certain Cash Basis Items Prorated Over Period To Which Attributable
I.R.C. § 706(d)(2)(A) In General —
I.R.C. § 706(d)(2)(A)(i) —
by assigning the appropriate portion of such item to each day in the period to which it is attributable, and
I.R.C. § 706(d)(2)(A)(ii) —
by allocating the portion assigned to any such day among the partners in proportion to their interests in the partnership at the close of such day.
I.R.C. § 706(d)(2)(B) Allocable Cash Basis Item —
For purposes of this paragraph, the term “allocable cash basis item” means any of the following items with respect to which the partnership uses the cash receipts and disbursements method of accounting:
I.R.C. § 706(d)(2)(B)(i) —
I.R.C. § 706(d)(2)(B)(ii) —
I.R.C. § 706(d)(2)(B)(iii) —
Payments for services or for the use of property.
I.R.C. § 706(d)(2)(B)(iv) —
Any other item of a kind specified in regulations prescribed by the Secretary as being an item with respect to which the application of this paragraph is appropriate to avoid significant misstatements of the income of the partners.
I.R.C. § 706(d)(2)(C) Items Attributable To Periods Not Within Taxable Year —
I.R.C. § 706(d)(2)(C)(i) —
any period before the beginning of the taxable year, such portion shall be assigned under subparagraph (A)(i) to the first day of the taxable year, or
I.R.C. § 706(d)(2)(C)(ii) —
any period after the close of the taxable year, such portion shall be assigned under subparagraph (A)(i) to the last day of the taxable year.
I.R.C. § 706(d)(2)(D) Treatment Of Deductible Items Attributable To Prior Periods —
I.R.C. § 706(d)(2)(D)(i) —
such portion shall be allocated among persons who are partners in the partnership during the period to which such portion is attributable in accordance with their varying interests in the partnership during such period, and
I.R.C. § 706(d)(2)(D)(ii) —
any amount allocated under clause (i) to a person who is not a partner in the partnership on such first day shall be capitalized by the partnership and treated in the manner provided for in section 755.
I.R.C. § 706(d)(3) Items Attributable To Interest In Lower Tier Partnership Prorated Over Entire Taxable Year —
I.R.C. § 706(d)(3)(A) —
during any taxable year of the partnership there is a change in any partner's interest in the partnership (hereinafter in this paragraph referred to as the “upper tier partnership”), and
I.R.C. § 706(d)(3)(B) —
such partnership is a partner in another partnership (hereinafter in this paragraph referred to as the “lower tier partnership”),
I.R.C. § 706(d)(4) Taxable Year Determined Without Regard To Subsection (c)(2)(A) —
(Aug. 16, 1954, ch. 736, 68A Stat. 242 ; Oct. 4, 1976, Pub. L. 94-455, title II, 213(c)(1), title XIX, 1906(b)(13)(A), 90 Stat. 1547, 1834; July 18, 1984, Pub. L. 98-369, div. A, title I, 72(a), (b), 98 Stat. 589, 591; Oct. 22, 1986, Pub. L. 99-514, title VIII, 806(a), title XVIII, 1805(a), 100 Stat. 2362, 2810; Nov. 10, 1988, Pub. L. 100-647, title I, 1008(e)(1)-(3), 102 Stat. 3439, 3440; Pub. L. 105-34, title V, XII, Sec. 507(b)(2), 1246, Aug. 5, 1997, 111 Stat 788; Pub. L. 115-141, Div. U, title IV, Sec. 401(a)(139), Mar. 23, 2018, 132 Stat. 348.)
2018--Subsec.(b)(5). Pub. L. 115-141, Div. U, Sec. 401(a)(139), amended par. (5) by substituting ‘‘section 584(i)’’ for ‘‘section 584(h)’’.
1997--Subsec. (b)(5). Pub. L. 105-34, Sec. 507(b)(2), substituted “section 644” for “section 645”.
Subsec. (c)(2)(A). Pub. L. 105-34, Sec. 1246(a), revised subparagraph (A), which prior to revision read as follows:
“(A) Disposition of entire interest
“The taxable year of a partnership shall close--
“(i) with respect to a partner who sells or exchanges his entire interest in a partnership, and
“(ii) with respect to a partner whose interest is liquidated, except that the taxable year of a partnership with respect to a partner who dies shall not close prior to the end of the partnership's taxable year.”
Subsec. (c)(2). Pub. L. 105-34, Sec. 1246(b) amended the heading for paragraph (2), which prior to revision read as follows:
“Partner who retires or sells interest in partnership”.
1988--Subsec. (b)(1)(B)(i). Pub. L. 100-647, 1008(e)(1)(A), amended cl. (i) generally. Prior to amendment, cl. (i) read as follows: “(i) the taxable year of 1 or more of its partners who have an aggregate interest in partnership profits and capital of greater than 50 percent,”.
Subsec. (b)(1)(B)(iii). Pub. L. 100-647, 1008(e)(2), substituted “unless the Secretary by regulations prescribes another period” for “or such other period as the Secretary may prescribe in regulations”.
Subsec. (b)(4). Pub. L. 100-647, 1008(e)(1)(B), substituted “Majority interest taxable year; limitation on required changes” for “Application of majority interest rule” in heading and amended text generally. Prior to amendment, text read as follows: “Clause (i) of paragraph (1)(B) shall not apply to any taxable year of a partnership unless the period which constitutes the taxable year of 1 or more of its partners who have an aggregate interest in partnership profits and capital of greater than 50 percent has been the same for--
“(A) the 3-taxable year period of such partner or partners ending on or before the beginning of such taxable year of the partnership, or
“(B) if the partnership has not been in existence during all of such 3-taxable year period, the taxable years of such partner or partners ending with or within the period of existence.
This paragraph shall apply without regard to whether the same partners or interests are taken into account in determining the 50 percent interest during any period.”
Subsec. (b)(5). Pub. L. 100-647, 1008(e)(3), added par. (5).
1986--Subsec. (b). Pub. L. 99-514, 806(a)(3), struck out “Adoption of” before “taxable year” in heading.
Subsec. (b)(1). Pub. L. 99-514, 806(a)(1), amended par. (1) generally. Prior to amendment, par. (1) read as follows: “The taxable year of a partnership shall be determined as though the partnership were a taxpayer. A partnership may not change to, or adopt, a taxable year other than that of all its principal partners unless it establishes, to the satisfaction of the Secretary, a business purpose therefor.”
Subsec. (b)(4). Pub. L. 99-514, 806(a)(2), added par. (4).
Subsec. (d)(2)(A)(i). Pub. L. 99-514, 1805(a)(1)(A), substituted “such item” for “each such item”.
Subsec. (d)(2)(B). Pub. L. 99-514, 1805(a)(1)(B), in introductory provisions, struck out “which are described in paragraph (1) and” after “the following items”.
Subsec. (d)(2)(C)(i). Pub. L. 99-514, 1805(a)(2), substituted “the first day of the taxable year” for “the first day of such taxable year”.
1984--Subsec. (c)(2)(A). Pub. L. 98-369, 72(b)(1), struck out last sentence providing that such partner's distributive share of item described in section 702(a) for such year shall be determined, under regulations prescribed by the Secretary, for the period ending with such sale, exchange, or liquidation.
Subsec. (c)(2)(B). Pub. L. 98-369, 72(b)(2), struck out “,but such partner's distributive share of items described in section 702(a) shall be determined by taking into account his varying interests in the partnership during the taxable year” after “otherwise)”.
Subsec. (d). Pub. L. 98-369, 72(a), added subsec. (d).
1976--Subsec. (b)(1), (2). Pub. L. 94-455, 1906(b)(13)(A), struck out “or his delegate” after “Secretary”.
Subsec. (c)(2). Pub. L. 94-455, 213(c)(1), 1906(b)(13)(A), substituted “or with respect to a partner whose interest is reduced (whether by entry of a new partner, partial liquidation of a partner's interest, gift, or otherwise)” for “or with respect to a partner whose interest is reduced”, in par. (B), and struck out “or his delegate” after “Secretary" in par. (A).
Amendment by Pub. L. 115-141, Div. U, Sec. 401(a)(139), effective March 23, 2018.
Section 507(c)(1). Pub. L. 105-34, provided that:
“Accumulation distributions. The amendments made by subsection (a) shall apply to distributions in taxable years beginning after the date of the enactment of this Act.” Section 507(c)(2) provided the following exception:
“Transferred property. the amendments made by subsection (b) shall apply to sales or exchanges after the date of the enactment of this Act.”
Section 1246(c). Pub. L. 105-34, provided that:
“The amendments made by this section shall apply to partnership taxable years beginning after December 31, 1997.”
“Subtitle D--Provisions Relating to Real Estate Investment Trusts”
Amendment by section 806(a) of Pub. L. 99-514 applicable to taxable years beginning after Dec. 31, 1986, with special provisions applicable to taxpayers who are required to change their accounting periods, see section 806(e) of Pub. L. 99-514, set out as a note under section 1378 of this title.
Amendment by section 1805(a) of 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.
Section 72(c) of Pub. L. 98-369, as amended by Pub. L. 99-514, 2, Oct. 22, 1986, 100 Stat. 2095, provided that: “The amendments made by this section [amending this section] shall apply--
“(1) in the case of items described in section 706(d)(2) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954 ] (as added by subsection (a)), to amounts attributable to periods after March 31, 1984, and
“(2) in the case of items described in section 706(d)(3) of such Code (as added by subsection (a)), to amounts paid or accrued by the other partnership after March 31, 1984.”
Amendment by section 213(c)(1) of Pub. L. 94-455 applicable in the case of partnership taxable years beginning after Dec. 31, 1975, see section 213(f) of Pub. L. 94-455, set out as an Effective Date note under section 709 of this title.
Nothing in section 806 of Pub. L. 99-514 or in any legislative history relating thereto to be construed as requiring the Secretary of the Treasury or his delegate to permit an automatic change of a taxable year, see section 1008(e)(9) of Pub. L. 100-647, set out as a note under section 1378 of this title.