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TITLE 26-INTERNAL REVENUE CODE (Aug. 16, 1954, ch. 736, 68A Stat. 238; Jan. 2, 1975, Pub. L. 93-597, § 4(a), 88 Stat. 1952; Oct. 4, 1976, Pub. L. 94-455, title XIX, § 1901(a)(92), 90 Stat. 1780; Oct. 20, 1976, Pub. L. 94-569, § 3(c), 90 Stat. 2699.) AMENDMENTS 1976--Subsec. (b). Pub. L. 94-569 substituted "to apply for any taxable year beginning" for "to apply for any taxable year beginning more than 2 years after" in the provisions preceding par. (1). substituted "after January 2, 1978" for "the date of enactment of this subsection" in par. (1). and substituted "more than 2 years after the date designated" for "the date designated" in par. (2). Pub. L. 94-455 substituted in section heading "of members" for "on members". 1975-Subsec. (a). Pub. L. 93-597, § 4(a)(1), (2), desig. nated existing provisions as subsec. (a). added subsec. catchline, and in subsec. (a) as so designated, struck out "during an induction period (as defined in section 112(c)(5))", respectively. Subsec. (b). Pub. L. 93-597, § 4(a)(3), added subsec. (b). EFFECTIVE DATE OF 1976 AMENDMENT Amendment of section catchline by Pub. L. 94-455 effective for tacable years beginning after Dec. 31, 1976, see section 1901(d) of Pub. L. 94-455, set out as an Effective Date of 1976 Amendment note under sec- tion 2 of this title. EFEcrIV DATE OF 1975 AM NDmT Section 4(b) of Pub. L. 93-597 provided that: "The amendments made by subsection (a) [amending this section] shall apply to taxable years ending on or after February 28. 1961." REFVNDS AND CREDITS OF OvEuAYMENTs FOR TAXABLE YEARS ENDING ON OR AFTER FEBRUARY 28, 1961, RE. SULTINO FROM APPLICATION OF PROVISIONS Section 4(c) of Pub. L 93-597 provided that: "If the refund or credit of any overpayment for any taxable year ending on or after February 28, 1961, resulting from the application of section 692 of the Internal Revenue Code of 1954 (as amended by subsection (a) of this section) [this section] is prevented at any time before the expiration of one year after the date of the enactment of this Act [Jan. 2, 1975] by the operation of any law or rule of law, but would not have been so prevented if claim for refund or credit therefor were made on the due date for the return for the taxable year of his death (or any later year), refund or credit of such overpayment may, nevertheless, be made or al- lowed if claim therefor is filed before the expiration of such one-year period." SECrION REFERRED TO IN OTHER SECTIONS This section is referred to in sections 5, 6013 of this title. Subchapter K-Partners and Partnerships Part I. Determination of tax liability. II. Contributions, distributions, and transfers. III. Definitions. SUBcHAPTER REFERRED TO IN OTHER SECTIONs This subchapter is referred to in sections 1011, 1012, 1016 of this title; title 46 section 1177. PART I-DETERMINATION OF TAX LIABILITY Se. 701. Partners, not partnership, subject to tax. 702. Income and credits of partner. 703. Partnership computations. 704. Partner's distributive share. Sec. 705. Determination of basis of partner's interest. 706. Taxable years of partner and partnership. 707. Transactions between partner and partnership. 708. Continuation of partnership. 709. Treatment of organization and syndication fees. AMENDMENTS 1976-Pub. L. 94-455, title II, § 213(b)(2), title XIX, * 1901(b)(23), Oct. 4, 1976, 90 Stat. 1547, 1798, struck out Part IV "Effective date for subchapter" in the table of parts of subchapter K of chapter 1 and added item 709. § 701. Partners, not partnership, subject to tax A partnership as such shall not be subject to the income tax imposed by this chapter. Per- sons carrying on business as partners shall be liable for income tax only in their separate or individual capacities. (Aug. 16, 1954, ch. 736, 68A Stat. 239.) CRoss REFERENCES Definitions of partnership, see sections 761, 7701 of this title. Partnerships electing to be taxed as corporations, see section 1361 of this title. § 702. Income and credits of partner (a) General rule In determining his income tax, each partner shall take into account separately his distribu- tive share of the partnership's- (1) gains and losses from sales or exchanges of capital assets held for not more than 9 months, (2) gains and losses from sales or exchanges of capital assets held for more than 9 months, (3) gains and losses from sales or exchanges of property described in section 1231 (relating to certain property used in a trade or business and involuntary conversions), (4) charitable contributions (as defined in section 170(c)), (5) dividends with respect to which there is provided an exclusion under section 116 or a deduction under part VIII of subchapter B, (6) taxes, described in section 901, paid or accrued to foreign countries and to posses- sions of the United States, (7) other items of income, gain, loss, deduc- tion, or credit, to the extent provided by regu- lations prescribed by the Secretary, and (8) taxable income or loss, exclusive of items requiring separate computation under other paragraphs of this subsection. (b) Character of items constituting distributive share The. character of any item of income, gain, loss, deduction, or credit included in a partner's distributive share under paragraphs (1) through (7) of subsection (a) shall be deter- mined as if such item were realized directly from the source from which realized by the partnership, or incurred in the same manner as incurred by the partnership. (c) Gross income of a partner In any case where it is necessary to determine the gross income of a partner for purposes of this title, such amount shall include his distrib- utive share of the gross income of the partner- ship. Page 482