26 USC 761 - Terms defined

U.S Code last checked for updates: Sep 22, 2026

§ 761.

Terms defined

(a)

Partnership

(1)

for investment purposes only and not for the active conduct of a business,

(2)

for the joint production, extraction, or use of property, but not for the purpose of selling services or property produced or extracted, or

(3)

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.

(b)

Partner

(c)

Partnership agreement

(d)

Liquidation of a partner’s interest

(e)

Distributions of partnership interests treated as exchanges

Except as otherwise provided in regulations, for purposes of—

(1)

section 708 (relating to continuation of partnership),

(2)

section 743 (relating to optional adjustment to basis of partnership property), and

(3)

any other provision of this subchapter 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 file a joint return for the taxable year, for purposes of this title—

(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 paragraph (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 (within the meaning of section 469(h) without regard to paragraph (5) thereof) in such trade or business, and

(C)

both spouses elect the application of this subsection.

(g)

Cross reference

(Aug. 16, 1954, ch. 736, 68A Stat. 252; Pub. L. 94–455, title II, § 213(c)(3)(B), title XIX, § 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1548, 1834; Pub. L. 96–222, title I, § 102(a)(2)(C), Apr. 1, 1980, 94 Stat. 208; Pub. L. 98–369, div. A, title I, § 75(b), July 18, 1984, 98 Stat. 594; Pub. L. 99–514, title XVIII, § 1805(c)(2), Oct. 22, 1986, 100 Stat. 2810; Pub. L. 110–28, title VIII, § 8215(a), May 25, 2007, 121 Stat. 193; Pub. L. 114–74, title XI, § 1102(a), Nov. 2, 2015, 129 Stat. 638.)

cite as: 26 USC 761