Internal Revenue Code · 26 U.S.C.
§ 702. Income and credits of partner
Official text, no changes From the Office of the Law Revision Counsel, release point 119-121 (current through Public Law 119-121 (October 9, 2026)). Compare it with the official text at uscode.house.gov (external site).
Cite as 26 U.S.C. § 702
At a glance
Read from the text, the source credit and the official notes. Not part of the law.
- Status
- In force
- Enacted
- February 26, 1964 by Pub. L. 88–272
- Last amended
- May 28, 2003 by Pub. L. 108–27
- Amendments
- 8 dated changes in the source credit
- Length
- 4 subsections · 435 words · about 2 min to read
- Cross-references
- cites 5; cited by 8 Code sections and 43 other regulations
- Regulations
- 3 issued under this section
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 determined 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.
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 distributive share of the gross income of the partnership.
For rules relating to procedures for determining the tax treatment of partnership items see subchapter C of chapter 63 (section 6221 and following).
(Aug. 16, 1954, ch. 736, 68A Stat. 239; Pub. L. 88–272, title II, § 201(d)(7), Feb. 26, 1964, 78 Stat. 32; Pub. L. 94–455, title XIV, § 1402(b)(1)(L), (2), title XIX, §§ 1901(b)(1)(I)(i), (ii), 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1732, 1791, 1834; Pub. L. 96–223, title IV, § 404(b)(5), Apr. 2, 1980, 94 Stat. 307; Pub. L. 97–34, title III, § 301(b)(5), (6)(C), Aug. 13, 1981, 95 Stat. 270; Pub. L. 97–248, title IV, § 402(c)(1), Sept. 3, 1982, 96 Stat. 667; Pub. L. 97–448, title I, § 103(a)(4), Jan. 12, 1983, 96 Stat. 2375; Pub. L. 98–369, div. A, title X, § 1001(b)(9), (e), July 18, 1984, 98 Stat. 1011, 1012; Pub. L. 99–514, title VI, § 612(b)(5), Oct. 22, 1986, 100 Stat. 2250; Pub. L. 108–27, title III, § 302(e)(8), May 28, 2003, 117 Stat. 764.)
Regulations under this section
Treasury regulations (26 CFR) issued under § 702
Cross-references
Computed from the citations in the text of Title 26 and 26 CFR.
This section cites 5 other sections
- § 1231 Property used in the trade or business and involuntary conversions
- § 170(c) Charitable, etc., contributions and gifts
- § 1(h)(11) Tax imposed
- § 901 Taxes of foreign countries and of possessions of United States
- § 6221 Determination at partnership level
Cited by 8 Code sections
- § 170(q)(4) Charitable, etc., contributions and gifts
- § 703(a)(1) Partnership computations
- § 704(d)(3)(A) Partner’s distributive share
- § 706(a) Taxable years of partner and partnership
- § 1366(a)(1)(B) Pass-thru of items to shareholders
- § 1402(a) Definitions
- § 6225(b)(3) Partnership adjustment by Secretary
- § 7519(d)(2)(A) Required payments for entities electing not to have required taxable year
Cited in 43 regulations not issued under it
- § 1.35-1 Partially tax-exempt interest received by individuals.
- § 1.46-3 Qualified investment.
- § 1.50B-4 Partnerships.
- § 1.58-2 General rules for conduit entities; partnerships and partners.
- § 1.61-13 Distributive share of partnership gross income; income in respect of a decedent; income from an interest in an estate or trust.
- § 1.67-2T Treatment of pass-through entities (temporary).
- § 1.163(j)-4 General rules applicable to C corporations (including REITs, RICs, and members of consolidated groups) and tax-exempt corporations.
- § 1.179-2 Limitations on amount subject to section 179 election.
- § 1.404(e)-1A Contributions on behalf of a self-employed individual to or under a qualified pension, annuity, or profit-sharing plan.
- § 1.441-2 Election of taxable year consisting of 52-53 weeks.
- § 1.444-2T Tiered structure (temporary).
- § 1.468B-2 Taxation of qualified settlement funds and related administrative requirements.
- § 1.469-7 Treatment of self-charged items of interest income and deduction.
- § 1.514(c)-1 Acquisition indebtedness.
- § 1.703-1 Partnership computations.
- § 1.704-1 Partner's distributive share.
- § 1.706-1 Taxable years of partner and partnership.
- § 1.706-4 Determination of distributive share when a partner's interest varies.
- § 1.707-1 Transactions between partner and partnership.
- § 1.736-1 Payments to a retiring partner or a deceased partner's successor in interest.
- § 1.737-1 Recognition of precontribution gain.
- § 1.751-1 Unrealized receivables and inventory items.
- § 1.852-4 Method of taxation of shareholders of regulated investment companies.
- § 1.901-3 Reduction in amount of foreign taxes on foreign mineral income allowed as a credit.
Show 19 more
- § 1.909-1 Definitions and special rules.
- § 1.909-6 Pre-2011 foreign tax credit splitting events.
- § 1.986(a)-1 Translation of foreign income taxes for purposes of the foreign tax credit.
- § 1.988-1 Certain definitions and special rules.
- § 1.1400Z2(a)-1 Deferring tax on capital gains by investing in opportunity zones.
- § 1.1402(a)-1 Definition of net earnings from self-employment.
- § 1.1402(a)-2 Computation of net earnings from self-employment.
- § 1.1402(a)-3 Special rules for computing net earnings from self-employment.
- § 1.1402(a)-8 Community income.
- § 1.1402(a)-15 Options available to farmers in computing net earnings from self-employment for taxable years ending on or after December 31, 1956.
- § 1.1402(c)-6 Members of certain professions.
- § 1.1402(f)-1 Computation of partner's net earnings from self-employment for taxable year which ends as result of his death.
- § 1.1411-10 Controlled foreign corporations and passive foreign investment companies.
- § 1.6654-2 Exceptions to imposition of the addition to the tax in the case of individuals.
- § 1.7519-1T Required payments for entities electing not to have required year (temporary).
- § 301.6225-1 Partnership adjustment by the Internal Revenue Service.
- § 301.6225-2 Modification of imputed underpayment.
- § 301.6225-3 Treatment of partnership adjustments that do not result in an imputed underpayment.
- § 301.9100-7T Time and manner of making certain elections under the Tax Reform Act of 1986.
Amendment history
From the source credit and the official notes, newest first.
- Amended by Pub. L. 108–27Parts changed in 2003: (a)(5)
- Amended by Pub. L. 99–514Parts changed in 1986: (a)(5)
- Amended by Pub. L. 98–369Parts changed in 1984: (a)(1)
- Amended by Pub. L. 97–448Parts changed in 1983: (a)(5)
- Amended by Pub. L. 97–248Parts changed in 1982: (d)
- Amended by Pub. L. 97–34Parts changed in 1981: (a)(5)
- Amended by Pub. L. 96–223Parts changed in 1980: (a)(5)
- Amended by Pub. L. 94–455Parts changed in 1976: (a)(1) (a)(7) (b)
- Enacted by Pub. L. 88–272Parts changed in 1964: (a)(5)
Where it sits in the Code
- Subtitle A Income Taxes
- Chapter 1 NORMAL TAXES AND SURTAXES
- Subchapter K Partners and Partnerships
- Part I DETERMINATION OF TAX LIABILITY
Nearby sections
Official notes
Show the Law Revision Counsel's notes (amendments, effective dates)
Editorial Notes
Amendments
2003—Subsec. (a)(5). Pub. L. 108–27 amended par. (5) generally. Prior to amendment, par. (5) read as follows: “dividends with respect to which there is a deduction under part VIII of subchapter B,”.
1986—Subsec. (a)(5). Pub. L. 99–514 amended par. (5) generally. Prior to amendment, par. (5) read as follows: “dividends or interest with respect to which there is an exclusion under section 116 or 128, or a deduction under part VIII of subchapter B,”.
1984—Subsec. (a)(1), (2). Pub. L. 98–369 substituted “6 months” for “1 year”, applicable to property acquired after June 22, 1984, and before Jan. 1, 1988. See Effective Date of 1984 Amendment note below.
1983—Subsec. (a)(5). Pub. L. 97–448 substituted “an exclusion under section 116 or 128,” for “provided an exclusion under section 116 or 128”.
1982—Subsec. (d). Pub. L. 97–248 added subsec. (d).
1981—Subsec. (a)(5). Pub. L. 97–34, § 301(b)(6)(C), inserted reference to “interest” in heading and text which continued the amendment made by Pub. L. 96–223.
Pub. L. 97–34, § 301(b)(5), inserted “or 128” after “section 116”.
1980—Subsec. (a)(5). Pub. L. 96–223 inserted “or interest” after “dividends”.
1976—Subsec. (a)(1), (2). Pub. L. 94–455, § 1402(b)(2), provided that “9 months” would be changed to “1 year”.
Pub. L. 94–455, § 1402(b)(1)(L), provided that “6 months” would be changed to “9 months” for taxable years beginning in 1977.
Subsec. (a)(7) to (9). Pub. L. 94–455, §§ 1901(b)(1)(I)(i), 1906(b)(13)(A), redesignated pars. (8) and (9) as (7) and (8), respectively, and in par. (7), as so redesignated, struck out “or his delegate” after “Secretary”. Former par. (7), which related to partially tax-exempt interest on obligations of the United States or its instrumentalities, was struck out.
Subsec. (b). Pub. L. 94–455, § 1901(b)(1)(I)(ii), substituted “paragraphs (1) through (7)” for “paragraphs (1) through (8)”.
1964—Subsec. (a)(5). Pub. L. 88–272 struck out “a credit under section 34,” before “an exclusion”.
Statutory Notes and Related Subsidiaries
Effective Date of 2003 Amendment
Amendment by Pub. L. 108–27 applicable, except as otherwise provided, to taxable years beginning after Dec. 31, 2002, see section 302(f) of Pub. L. 108–27, set out as an Effective and Termination Dates of 2003 Amendment note under section 1 of this title.
Effective Date of 1986 Amendment
Amendment by Pub. L. 99–514 applicable to taxable years beginning after Dec. 31, 1986, see section 612(c) of Pub. L. 99–514, set out as a note under section 301 of this title.
Effective Date of 1984 Amendment
Amendment by Pub. L. 98–369 applicable to property acquired after June 22, 1984, and before Jan. 1, 1988, see section 1001(e) of Pub. L. 98–369, set out as a note under section 166 of this title.
Effective Date of 1983 Amendment
Amendment by Pub. L. 97–448 effective, except as otherwise provided, as if it had been included in the provision of the Economic Recovery Tax Act of 1981, Pub. L. 97–34, to which such amendment relates, see section 109 of Pub. L. 97–448, set out as a note under section 1 of this title.
Effective Date of 1982 Amendment
Pub. L. 97–248, title IV, § 407(a), Sept. 3, 1982, 96 Stat. 670, as amended by Pub. L. 99–514, § 2, Oct. 22, 1986, 100 Stat. 2095, provided that:
“(1) Except as provided in paragraph (2), the amendments made by sections 402, 403, and 404 [enacting sections 6221 to 6234 of this title and section 1508 of Title 28, Judiciary and Judicial Procedure, amending this section and sections 6031, 6213, 6216, 6422, 6501, 6504, 6511, 6512, 6515, 7422, 7451, 7456, 7459, 7482, and 7485 of this title and section 1346 of Title 28, and enacting provisions set out as a note under section 6031 of this title] shall apply to partnership taxable years beginning after the date of the enactment of this Act [Sept. 3, 1982].“(2) [Former] Section 6232 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] shall apply to periods after December 31, 1982.“(3) The amendments made by sections 402, 403, and 404 shall apply to any partnership taxable year (or in the case of [former] section 6232 of such Code, to any period) ending after the date of the enactment of this Act [Sept. 3, 1982] if the partnership, each partner, and each indirect partner requests such application and the Secretary of the Treasury or his delegate consents to such application.”
Effective Date of 1981 Amendment
Amendment by section 301(b)(5) of Pub. L. 97–34 applicable to taxable years ending after Sept. 30, 1981, and amendment by section 301(b)(6)(C) of Pub. L. 97–34 applicable to taxable years beginning after Dec. 31, 1981, see section 301(d) of Pub. L. 97–34, set out as a note under section 265 of this title.
Effective and Termination Dates of 1980 Amendment
Amendment by Pub. L. 96–223 applicable with respect to taxable years beginning after Dec. 31, 1980, and before Jan. 1, 1982, see section 404(c) of Pub. L. 96–223, set out as a note under section 265 of this title.
Effective Date of 1976 Amendment
Pub. L. 94–455, title XIV, § 1402(b)(1), Oct. 4, 1976, 90 Stat. 1731, provided that the amendment made by that section is effective with respect to taxable years beginning in 1977.
Pub. L. 94–455, title XIV, § 1402(b)(2), Oct. 4, 1976, 90 Stat. 1732, provided that the amendment made by that section is effective with respect to taxable years beginning after Dec. 31, 1977.
Amendment by section 1901(b)(1)(I)(i), (ii) of Pub. L. 94–455 effective for taxable years beginning after Dec. 31, 1976, see section 1901(d) of Pub. L. 94–455, set out as a note under section 2 of this title.
Effective Date of 1964 Amendment
Amendment by Pub. L. 88–272 applicable with respect to dividends received after Dec. 31, 1964, in taxable years ending after such date, see section 201(e) of Pub. L. 88–272, set out as a note under section 22 of this title.