2023 Laws of Puerto Rico › TITLE THIRTEEN - Taxation and Finance (§§ 1 — 33423) › Subtitle 17 - Internal Revenue Code of 2011 (§§ 30001 — 33423) › PART II - Income Taxes (§§ 30041 — 30622) › Chapter 1009 - Partnerships and Partners (§§ 30321 — 30378) › § 30321 - Definitions

(a) Partnership.—
(1) In general.-For purposes of this part, 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 part, a corporation or a trust or estate. 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 chapter, if it is availed of-
(A) For investment purposes only and not for the active conduct of a business;
(B) for the joint production, extraction, or use of property, but not for the purpose of selling services or property produced or extracted; or
(C) 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.
(2) The term “partnership” also includes such limited liability companies that, pursuant to the provisions of § 30041(a)(3) of this title, are subject to taxation under the provisions of this chapter.
(b) Partner.— For purposes of this part, the term “partner” means a member of a partnership. The term “partner” includes a member of a limited liability company subject to taxation under the provisions of this chapter, pursuant to § 30041(a)(3) of this title.
(c) Partnership agreement.— For purposes of this chapter, a partnership agreement includes any modifications of the partnership agreement made prior to, or at the time prescribed by law for filing the partnership return for the taxable year (not including extensions) which are agreed to by all the partners, or which are otherwise adopted pursuant to the provisions of the partnership agreement.
(d) Liquidation of a partner’s interest.— For purposes of this chapter, 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 30338 of this title (relating to continuation of partnership);
(2) § 30363 of this title (relating to optional adjustment to basis of partnership property), and
(3) any other provision of this chapter 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) Qualified joint venture.—
(1) In general.— In the case of a qualified joint venture conducted by a husband and wife who qualified as married individuals, as provided in § 30043(a)(2) of this title, for purposes of this chapter:
(A) Such joint venture shall not be treated as a partnership;
(B) all items of income, gain, loss, deduction, and credit shall be divided between the spouses in accordance with their respective interests in the venture, and
(C) 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.
(2) Qualified joint venture.— For purposes of clause (1), the term “qualified joint venture” means any joint venture involving the conduct of a trade or business if:
(A) The only members of such joint venture are a husband and wife;
(B) both spouses materially participate in such trade or business, and
(C) both spouses elect the application of this subsection.
(g) Cross reference.— For rules applicable in the case of the sale, exchange, liquidation, or reduction of a partner’s interest, see §§ 30324(b) and 30336(c)(2) of this title.
History —Jan. 31, 2011, No. 1, § 1070.01, retroactive to Jan. 1, 2011; Dec. 10, 2011, No. 232, § 83.