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 1013 - Other Special Taxpayers (§§ 30501 — 30622) › Subchapter D - Special Partnerships and Partners (§§ 30551 — 30578) › § 30556 - Inclusion of special partnership income

(a) General rule.— In determining his/her tax liability, each partner shall take into account separately (subject to the conditions and limitations provided in this part) his/her distributive share of the special partnership for any of its taxable years ended within or simultaneously with the partner’s taxable year, with respect to:
(1) Gains and losses from sales or exchanges of capital assets held by the special partnership for not more than six (6) months;
(2) gains and losses from sales or exchanges of capital assets held by the special partnership for more than six (6) months;
(3) gains and losses from sales or exchanges of property described in § 30141(i) of this title;
(4) gains and losses from sales or exchanges of all assets of a tax-exempt business under the Puerto Rico Tourism Development Act of 1993, §§ 6001 et seq. of Title 23, or under any other succeeding law of a similar nature;
(5) dividends to which the provisions of § 30086 of this title apply;
(6) tax withheld on dividends described in clause (5);
(7) taxes described in §§ 30201 and 30272 of this title;
(8) taxes described in §§ 30273 and 30274 of this title;
(9) income or loss derived from activities covered by a tax exemption resolution or concession, as the case may be, under the Puerto Rico Tourism Incentives Act of 1983, as amended, or the Puerto Rico Tourist Development Act of 1993, §§ 693 et seq. of Title 23, or under any other succeeding law of similar in nature;
(10) partnership’s net income or loss, excluding items requiring separate consideration under other clauses of this subsection, and
(11) other income, gain, loss, deduction, or credit items, as provided by the Secretary through regulations, including the distributive share of each partner in the amount of expenses incurred or paid to a related party or a home office located outside of Puerto Rico, in the value of personal property purchased from such parties, as provided in § 30073 of this title, and in the gross income, as defined in § 30090(e) of this title.
The provisions of this subsection shall not apply to a partner that is subject to the tax imposed under §§ 30431(a) and 30441(a) of this title. For the purposes of §§ 30431(a) and 30441(a) of this title the distributive share of a partner in the net income of a special partnership shall be the total taxable amount of clauses (1) through (5), and (9) through (11) of subsection (a).
(b) Option to treat certain items as ordinary income or loss.—
(1) For any taxable year, a partner can opt, with respect to each special partnership, to treat his/her distributive share in the items described in clauses (1)-(3) and (5) and (11) of subsection (a) as part of his/her ordinary income or loss under subsection (a)(10), except that for such purposes, the amount allowed as a deduction for his/her distributive share in the losses on the sale or exchange of capital assets by the partnership shall be limited to the amount includible on account of his/her distributive share in the gains of said partnership on said sales or exchanges.
(2) The option provided in clause (1) shall be made by the partner in accordance with the regulations promulgated by the Secretary and, once made for a particular taxable year, shall be irrevocable with respect to that whole year.
(c) Nature of items that constitute distributive share.— The nature, source, and character of any item of income, gain, loss, deduction, or credit included in the distributive share of the partner under clauses (1)-(11) of subsection (a), shall be determined as if said item were realized by the partner directly from the source from which it was realized by the special partnership, or incurred in the same manner as was incurred by the special partnership.
(d) Gross income of a partner.— In any case in which it is necessary to determine the gross income of a partner for purposes of this part, said gross income shall include his/her distributive share in the special partnership in the items described in clauses (1)-(5) and (9)-(11) of subsection (a).
Notwithstanding the above stated, to determine, under §§ 30151 and 30152 of this title, the source of interest and dividends paid by a partner, the gross income of the partner shall include his/her distributive share in the special partnership of the aggregate amount of the items described in clauses (1)-(5) and (9)-(11) of subsection (a).
History —Jan. 31, 2011, No. 1, § 1114.06, retroactive to Jan. 1, 2011; June 30, 2013, No. 40, § 31.