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TITLE 26-INTERNAL REVENUE CODE market value and the adjusted basis of part- nership properties, or (2) in any other manner permitted by regu- lations prescribed by the Secretary. (b) Special rule In applying the allocation rules provided in subsection (a), increases or decreases in the ad- justed basis of partnership property arising from a distribution of, or a transfer of an inter- est attributable to, property consisting of- (1) capital assets and property described in section 1231(b), or (2) any other property of the partnership, shall be allocated to partnership property of a like character except that the basis of any such partnership property shall not be reduced below zero. If, in the case of a distribution, the adjustment to basis of property described in paragraph (1) or (2) is prevented by the absence of such property or by insufficient adjusted basis for such property, such adjustment shall be applied to subsequently acquired property of a like character in accordance with regulations prescribed by the Secretary. (Aug. 16, 1954, ch. 736, 68A Stat. 252; Oct. 4, 1976, Pub. L. 94-455, title XIX, § 1906(b)(13)(A), 90 Stat. 1834.) AMENDMENTS 1976-Subsecs. (a), (b). Pub. L. 94-455 struck out "or his delegate" following "Secretary". SECTION REFERRED TO IN OTHER SECTIONS This section is referred to in sections 734, 743 of this title. PART III-DEFINITIONS Sec. 761. Terms defined. § 761. Terms defined (a) Partnership For purposes of this subtitle, the term "part- nership" includes a syndicate, group, pool, joint venture, or other unincorporated organization through or by means of which any business, fi- nancial operation, or venture is carried on, and which is not, within the meaning of this title, a corporation or a trust or estate. Under regula- tions the Secretary may, at the election of all the members of an unincorporated organiza- tion, exclude such organization from the appli- cation of all or part of this subchapter, if it is availed of- (1) for investment purposes only and not for the active conduct of a business, or (2) for the joint production, extraction, or use of property, but not for the purpose of selling services or property produced or ex- tracted, if the income of the members of the organiza- tion may be adequately determined without the computation of partnership taxable income. (b) Partner For purposes of this subtitle, the term "part- ner" means a member of a partnership. (c) Partnership agreement For purposes of this subchapter, a partner- ship agreement includes any modifications of the partnership agreoment made prior to, or at, the time prescribed by law for the filing of the partnership return for the taxable year (not in- cluding extensions) which are agreed to by all the partners, or which are adopted in such other manner as may be provided by the part- nership agreement. (d) Liquidation of a partner's Interest. For purposes of this subchapter, 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) Cross reference For rules in the case of the sale, exchange, liquidation, or reduction of a partner's Interest, see sections 704(b) and 706(e)(2). (Aug. 16, 1954, ch. 736, 68A Stat. 252; Oct. 4, 1976, Pub. L. 94-455, title II, § 213(c)(3)(B), title XIX, § 1906(b)(13)(A), 90 Stat. 1548, 1834.) AMENDMENTS 1976-Subsec. (a). Pub. L. 94-455, § 1906(b)(13)(A), struck out "or his delegate" following "Secretary". Subsec. (e). Pub. L. 94-455, § 213(c)(3)(B), added subsec. (e). EmcTiVE DATE OF 1976 AMENDMENT Amendment of subsec. (e) by section 213(c)(3)(B) of Pub. L. 94-455 applicable in the case of partnership taxable years beginning after Dec. 31, 1975, see section 213(f)(1) of Pub. L. 94-455, set out as an Effective Date of 1976 Amendment note under section 709 of this title. [§ 771. Repealed. Pub. L. 94-455, title XIX, § 1901(a)(94), Oct. 4, 1976, 90 Stat. 1780] Section, act Aug. 16, 1954, ch. 736, 68A Stat. 253, re- lating to the effective date for this subchapter, was re- pealed along with the part heading and section analy- sis for item 771, which made up part IV of this sub. chapter. Subchapter L-Insurance Companies Part I. Life insurance companies. II. Mutual insurance companies (other than life and certain marine insurance companies and other than fire or flood insurance companies which operate on basis of perpetual policies or premi- um deposits). III. Other insurance companies. IV. Provisions of general application. AMENDMENTS 1962-Pub. L. 87-834, § 8(g)(4)(A), Oct. 18, 1962, 76 Stat. 999, substituted "and certain marine insurance companies and other than fire or flood insurance com- panies which operate on basis of perpetual policies or premium deposits" for "or marine or fire insurance companies issuing perpetual policies" in the heading of Part II. SuacHApn- REFERRED TO IN OTHER SECTIONS This subchapter is referred to in sections 6425, 6655 of this title. PART I-LIFE INSURANCE COMPANIES Subpart A. Definition' tax imposed. B. Investment income. C. Gain and loss from operations. D. Distributions to shareholders. E. Miscellaneous provisions. Page 494