Title 26 — Internal Revenue Code
Part I · Chapter 1 — Normal Taxes and Surtaxes
§ 703. Partnership computations
Statutory text
Income and deductions
The taxable income of a partnership shall be computed in the same manner as in the case of an individual except that—
the items described in section 702(a) shall be separately stated, and
the following deductions shall not be allowed to the partnership:
the deductions for personal exemptions provided in section 151,
the deduction for taxes provided in section 164(a) with respect to taxes, described in section 901, paid or accrued to foreign countries and to possessions of the United States,
the deduction for charitable contributions provided in section 170,
the net operating loss deduction provided in section 172,
the additional itemized deductions for individuals provided in part VII of subchapter B (sec. 211 and following), and
the deduction for depletion under section 611 with respect to oil and gas wells.
Elections of the partnership
Any election affecting the computation of taxable income derived from a partnership shall be made by the partnership, except that any election under—
subsection (b)(5) or (c)(3) of section 108 (relating to income from discharge of indebtedness),
section 617 (relating to deduction and recapture of certain mining exploration expenditures), or
section 901 (relating to taxes of foreign countries and possessions of the United States),
shall be made by each partner separately.
Legislative history
Reconstructed from this section’s Code source credit and amendment notes, resolved against the local Statutes at Large. Editorial notes are evidence, not the law that made the change.
Aug. 16, 1954, ch. 736, 68A Stat. 240 · 68A Stat. 240
Enacted · 26 U.S.C. § 703
Aug. 16, 1954, ch. 736, 68A Stat. 240
Source evidence
Code source credit
Aug. 16, 1954, ch. 736, 68A Stat. 240Pub. L. 89–570 § 2(b) · 80 Stat. 759
Changed · 26 U.S.C. § 703(b)
Pub. L. 89–570 provided for election under section 615 (relating to exploration expenditures) or under section 617 (relating to additional exploration expenditures in the case of domestic mining)
Source evidence
Code amendment note
Subsec. (b). Pub. L. 89–570 provided for election under section 615 (relating to exploration expenditures) or under section 617 (relating to additional exploration expenditures in the case of domestic mining).Enacted provision · exact public law section
(b) Section 7034b) of such Code (relating to elections of partnerships) is amended by inserting after “United States,” the following: “and any election under section 615 (relating to exploration expenditures) or under section 617 (relating to additional exploration expenditures in the case of domestic mining),”.Tax Reform Act of 1969
Pub. L. 91–172 title V § 504(c)(3) · 83 Stat. 487
Substituted · 26 U.S.C. § 703(b)
Pub. L. 91–172 substituted “(relating to pre-1970 exploration expenditures) or under section 617 (relating to deduction and recapture of certain mining exploration expenditures)” for “(relating to exploration expenditures) or under section 617 (relating to additional exploration expenditures in the case of domestic mining)”
Source evidence
Code amendment note
Subsec. (b). Pub. L. 91–172 substituted “(relating to pre-1970 exploration expenditures) or under section 617 (relating to deduction and recapture of certain mining exploration expenditures)” for “(relating to exploration expenditures) or under section 617 (relating to additional exploration expenditures in the case of domestic mining)”.Enacted provision · exact public law section
(3) Section 703(b) is amended by striking out “(relating to 26 USC 703. exploration expenditures) or under section 617 (relating to additional exploration expenditures in the case of domestic mining)” and inserting in lieu thereof “(relating to pre-1970 exploration expenditures) or under section 617 (relating to deduction and recapture of certain mining exploration expenditures)”.Revenue Act of 1971
Pub. L. 92–178 title III § 304(c) · 85 Stat. 494
Substituted · 26 U.S.C. § 703(b)
Pub. L. 92–178 substituted “,” for “or” after “(relating to pre-1970 exploration expenditures)”
Inserted · 26 U.S.C. § 703(b)
Pub. L. 92–178 inserted “under section 57(c) (relating to definition of net lease), or under section 163(d) (relating to limitation on interest on investment indebtedness)” after “(relating to deduction and recapture of certain mining exploration expenditures)”
Source evidence
Code amendment note
Subsec. (b). Pub. L. 92–178 substituted “,” for “or” after “(relating to pre-1970 exploration expenditures)” and inserted “under section 57(c) (relating to definition of net lease), or under section 163(d) (relating to limitation on interest on investment indebtedness)” after “(relating to deduction and recapture of certain mining exploration expenditures)”.Enacted provision · exact public law section
(c) Election by Members of Partnership— Section 703(b) (relating 68A Stat. 240; 83 Stat. 633. to elections of a partnership) is amended by— (1) striking out “or” after “(relating to pre–1970 exploration expenditures)” and inserting in lieu thereof a comma; and (2) inserting after “(relating to deduction and recapture of certain mining exploration expenditures)” the following: “under section Ante, p. 522. 57(c) (relating to definition of net lease), or under section 163(d) (relating to limitation on interest on investment indebtedness) Supra. ”,Tax Reduction Act of 1975
Pub. L. 94–12 title V § 501(b)(3) · 89 Stat. 26
Added · 26 U.S.C. § 703(a)(2)(G)
Pub. L. 94–12 added subpar. (G)
Source evidence
Code amendment note
Subsec. (a)(2)(G). Pub. L. 94–12 added subpar. (G).Pub. L. 94–455 § 2115(c)(2) · 90 Stat. 1520
Substituted · 26 U.S.C. § 703(a)(2)(G)
Pub. L. 94–455, § 2115(c)(2), substituted “wells” for “production subject to the provisions of section 613A(c)”
Source evidence
Code amendment note
Subsec. (a)(2)(G). Pub. L. 94–455, § 2115(c)(2), substituted “wells” for “production subject to the provisions of section 613A(c)”.Enacted provision · exact public law section
(2) Subparagraph (G) of section 703(a)(2) (relating to 26 USC 703. deductions not allowed to a partnership) is amended by striking out “production subject to the provisions of section 613A(c)” and inserting in lieu thereof “wells”.Pub. L. 94–455 § 1901(b)(21)(F) · 90 Stat. 1520
Struck · 26 U.S.C. § 703(b)
Pub. L. 94–455, § 1901(b)(21)(F), struck out “under section 615 (relating to pre-1970 exploration expenditures),” after “of the United States, and any election”
Source evidence
Code amendment note
Subsec. (b). Pub. L. 94–455, § 1901(b)(21)(F), struck out “under section 615 (relating to pre-1970 exploration expenditures),” after “of the United States, and any election”.Enacted provision · exact public law section
(F) Section 703 (b) is amended by striking out “under section 615 (relating to pre–1970 exploration expenditures),”.Tax Reduction and Simplification Act of 1977
Pub. L. 95–30 title I § 101(d)(10) · 91 Stat. 126
Struck · 26 U.S.C. § 703(a)(2)
Pub. L. 95–30 struck out subpar. (A) which made reference to the standard deduction provided in section 141
Redesignated · 26 U.S.C. § 703(a)(2)
Pub. L. 95–30 redesignated subpars. (B) to (G) as (A) to (F), respectively
Source evidence
Code amendment note
Subsec. (a)(2). Pub. L. 95–30 struck out subpar. (A) which made reference to the standard deduction provided in section 141, and redesignated subpars. (B) to (G) as (A) to (F), respectively.Enacted provision · exact public law section
(10) Subsection (a) (2) of section 703 (relating to partnership income and deductions) is amended— (A) by striking out subparagraph (A), and (B) by redesignating subparagraphs (B) through (G) as subparagraphs (A) through (F),respectively.Pub. L. 96–589 § 2(e)(1) · 94 Stat. 3389
Inserted · 26 U.S.C. § 703(b)
Pub. L. 96–589 inserted reference to section 108(b)(5) and (d)(4)
Source evidence
Code amendment note
Subsec. (b). Pub. L. 96–589 inserted reference to section 108(b)(5) and (d)(4).Enacted provision · exact public law section
(1) Subsection (b) of section 703 (relating to elections of the partnership) is amended to read as follows: “(b) Elections of the Partnership.— Any election affecting the computation of taxable income derived from a partnership shall be made by the partnership, except that any election under— “(1) section 57(c) (defining net lease), “(2) subsection (b)(5) or (d)(4) of section 108 (relating to income from discharge of indebtedness), “(3) section 163(d) (relating to limitation of interest on investment indebtedness), “(4) section 617 (relating to deduction and recapture of certain mining exploration expenditures), or “(5) section 901 (relating to taxes of foreign countries and possessions of the United States), shall be made by each partner separately.”Tax Reform Act of 1986
Pub. L. 99–514 title V § 511(d)(2)(B) · 100 Stat. 2085
Struck · 26 U.S.C. § 703(b)
Pub. L. 99–514 struck out former pars. (1) and (3) which related to elections under sections 57(c) and 163(d), respectively
Redesignated · 26 U.S.C. § 703(b)
Pub. L. 99–514 redesignated former pars. (2), (4), and (5), as pars. (1), (2), and (3), respectively
Source evidence
Code amendment note
Subsec. (b). Pub. L. 99–514 struck out former pars. (1) and (3) which related to elections under sections 57(c) and 163(d), respectively, and redesignated former pars. (2), (4), and (5), as pars. (1), (2), and (3), respectively.Enacted provision · exact public law section
(B) Section 703(b) is amended by striking out paragraph (3) and by redesignating paragraphs (4) and (5) as paragraphs (3) and (4), respectively.Technical and Miscellaneous Revenue Act of 1988
Pub. L. 100–647 title I § 1008(i) · 102 Stat. 3342
Substituted · 26 U.S.C. § 703(b)(1)
Pub. L. 100–647 substituted “subsection (b)(5)” for “subsection (b)(5) or (d)(4)”
Source evidence
Code amendment note
Subsec. (b)(1). Pub. L. 100–647 substituted “subsection (b)(5)” for “subsection (b)(5) or (d)(4)”.Enacted provision · exact public law section
(i) Amendment Related to Section 822 of the Reform Act.— Paragraph (1) of section 703(b) of the 1986 Code is amended by striking out “or (d)(4)”.Omnibus Budget Reconciliation Act of 1993
Pub. L. 103–66 title XIII § 13150(c)(9) · 107 Stat. 312
Substituted · 26 U.S.C. § 703(b)(1)
Pub. L. 103–66 substituted “subsection (b)(5) or (c)(3)” for “subsection (b)(5)”
Source evidence
Code amendment note
Subsec. (b)(1). Pub. L. 103–66 substituted “subsection (b)(5) or (c)(3)” for “subsection (b)(5)”.Effective date note
Amendment by Pub. L. 103–66 applicable to discharges after Dec. 31, 1992, in taxable years ending after such date, see section 13150(d) of Pub. L. 103–66, set out as a note under section 108 of this title.
12 of 15 references resolved to an enrolled provision · 3 partial
Editorial Notes
Amendments1966–1993 · 10 rounds
1993
Subsec. (b)(1). Pub. L. 103–66 substituted “subsection (b)(5) or (c)(3)” for “subsection (b)(5)”.
1988
Subsec. (b)(1). Pub. L. 100–647 substituted “subsection (b)(5)” for “subsection (b)(5) or (d)(4)”.
1986
Subsec. (b). Pub. L. 99–514 struck out former pars. (1) and (3) which related to elections under sections 57(c) and 163(d), respectively, and redesignated former pars. (2), (4), and (5), as pars. (1), (2), and (3), respectively.
1980
Subsec. (b). Pub. L. 96–589 inserted reference to section 108(b)(5) and (d)(4).
1977
Subsec. (a)(2). Pub. L. 95–30 struck out subpar. (A) which made reference to the standard deduction provided in section 141, and redesignated subpars. (B) to (G) as (A) to (F), respectively.
1976
Subsec. (a)(2)(G). Pub. L. 94–455, § 2115(c)(2), substituted “wells” for “production subject to the provisions of section 613A(c)”.
Subsec. (b). Pub. L. 94–455, § 1901(b)(21)(F), struck out “under section 615 (relating to pre-1970 exploration expenditures),” after “of the United States, and any election”.
1975
Subsec. (a)(2)(G). Pub. L. 94–12 added subpar. (G).
1971
Subsec. (b). Pub. L. 92–178 substituted “,” for “or” after “(relating to pre-1970 exploration expenditures)” and inserted “under section 57(c) (relating to definition of net lease), or under section 163(d) (relating to limitation on interest on investment indebtedness)” after “(relating to deduction and recapture of certain mining exploration expenditures)”.
1969
Subsec. (b). Pub. L. 91–172 substituted “(relating to pre-1970 exploration expenditures) or under section 617 (relating to deduction and recapture of certain mining exploration expenditures)” for “(relating to exploration expenditures) or under section 617 (relating to additional exploration expenditures in the case of domestic mining)”.
1966
Subsec. (b). Pub. L. 89–570 provided for election under section 615 (relating to exploration expenditures) or under section 617 (relating to additional exploration expenditures in the case of domestic mining).
Statutory Notes and Related Subsidiaries
Effective Date of 1993 Amendment
Amendment by Pub. L. 103–66 applicable to discharges after , in taxable years ending after such date, see section 13150(d) of Pub. L. 103–66, set out as a note under section 108 of this title.
Effective Date of 1988 Amendment
Amendment by Pub. L. 100–647 effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986, Pub. L. 99–514, to which such amendment relates, see section 1019(a) of Pub. L. 100–647, set out as a note under section 1 of this title.
Effective Date of 1986 Amendment
Amendment by section 511(d)(2)(B) of Pub. L. 99–514 applicable to taxable years beginning after , see section 511(e) of Pub. L. 99–514, set out as a note under section 163 of this title.
Amendment by section 701(e)(4)(E) of Pub. L. 99–514 applicable to taxable years beginning after , with certain exceptions and qualifications, see section 701(f) of Pub. L. 99–514, set out as an Effective Date note under section 55 of this title.
Effective Date of 1980 Amendment
Amendment by Pub. L. 96–589 applicable to transactions which occur after , other than transactions which occur in a proceeding in a bankruptcy case or similar judicial proceeding or in a proceeding under Title 11 commencing on or after , with an exception permitting the debtor to make the amendment applicable to transactions occurring after ; in a specified manner, see section 7(a)(1), (f) of Pub. L. 96–589, set out as a note under section 108 of this title.
Effective Date of 1977 Amendment
Amendment by Pub. L. 95–30 applicable to taxable years beginning after , see section 106(a) of Pub. L. 95–30, set out as a note under section 1 of this title.
Effective Date of 1976 Amendment
Amendment by section 1901(b)(21)(F) of Pub. L. 94–455 effective for taxable years beginning after , see section 1901(d) of Pub. L. 94–455, set out as a note under section 2 of this title.
Amendment by section 2115(c)(2) of Pub. L. 94–455 effective on and applicable to taxable years ending after , see section 2115(f) of Pub. L. 94–455, set out as a note under section 613A of this title.
Effective Date of 1975 Amendment
Amendment by Pub. L. 94–12 effective , to apply to taxable years ending after , see section 501(c) of Pub. L. 94–12, set out as an Effective Date note under section 613A of this title.
Effective Date of 1969 Amendment
Amendment by Pub. L. 91–172 applicable with respect to exploration expenditures paid or incurred after , see section 504(d)(1) of Pub. L. 91–172, set out as an Effective Date note under section 243 of this title.
Effective Date of 1966 Amendment
Amendment by Pub. L. 89–570 applicable to taxable years ending after , but only in respect of expenditures paid or incurred after such date, see section 3 of Pub. L. 89–570, set out as an Effective Date note under section 617 of this title.
Applicability of Certain Amendments by Pub. L. 99–514 in Relation to Treaty Obligations of United States
For applicability of amendment by section 701(e)(4)(E) of Pub. L. 99–514 notwithstanding any treaty obligation of the United States in effect on , with provision that for such purposes any amendment by title I of Pub. L. 100–647 be treated as if it had been included in the provision of Pub. L. 99–514 to which such amendment relates, see section 1012(aa)(2), (4) of Pub. L. 100–647, set out as a note under section 861 of this title.
Credits
1954–1993 · 11 acts
- 1954Aug. 16, 1954, ch. 736, 68A Stat. 240
- 1966Pub. L. 89–570, § 2(b), , 80 Stat. 764
- 1969Pub. L. 91–172, title V, § 504(c)(3), , 83 Stat. 633
- 1971Pub. L. 92–178, title III, § 304(c), , 85 Stat. 523
- 1975Pub. L. 94–12, title V, § 501(b)(3), , 89 Stat. 53
- 1976Pub. L. 94–455, title XIX, § 1901(b)(21)(F), title XXI, § 2115(c)(2), , 90 Stat. 1798, 1909
- 1977Pub. L. 95–30, title I, § 101(d)(10), , 91 Stat. 134
- 1980Pub. L. 96–589, § 2(e)(1), , 94 Stat. 3396
- 1986Pub. L. 99–514, title V, § 511(d)(2)(B), title VII, § 701(e)(4)(E), , 100 Stat. 2249, 2343
- 1988Pub. L. 100–647, title I, § 1008(i), , 102 Stat. 3445
- 1993Pub. L. 103–66, title XIII, § 13150(c)(9), , 107 Stat. 448.
Show as published
(Aug. 16, 1954, ch. 736, 68A Stat. 240; Pub. L. 89–570, § 2(b), , 80 Stat. 764; Pub. L. 91–172, title V, § 504(c)(3), , 83 Stat. 633; Pub. L. 92–178, title III, § 304(c), , 85 Stat. 523; Pub. L. 94–12, title V, § 501(b)(3), , 89 Stat. 53; Pub. L. 94–455, title XIX, § 1901(b)(21)(F), title XXI, § 2115(c)(2), , 90 Stat. 1798, 1909; Pub. L. 95–30, title I, § 101(d)(10), , 91 Stat. 134; Pub. L. 96–589, § 2(e)(1), , 94 Stat. 3396; Pub. L. 99–514, title V, § 511(d)(2)(B), title VII, § 701(e)(4)(E), , 100 Stat. 2249, 2343; Pub. L. 100–647, title I, § 1008(i), , 102 Stat. 3445; Pub. L. 103–66, title XIII, § 13150(c)(9), , 107 Stat. 448.)