U.S. Code » Title 26 » Subtitle Subtitle A— Income Taxes › Chapter CHAPTER 1— NORMAL TAXES AND SURTAXES › Subchapter Subchapter K— Partners and Partnerships › Part PART I— DETERMINATION OF TAX LIABILITY

26 U.S.C. § 708

Continuation of partnership

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(a) General rule

For purposes of this subchapter, an existing partnership shall be considered as continuing if it is not terminated.

(b) Termination(1) General rule

For purposes of subsection (a), a partnership shall be considered as terminated only if no part of any business, financial operation, or venture of the partnership continues to be carried on by any of its partners in a partnership.

(2) Special rules(A) Merger or consolidation

In the case of the merger or consolidation of two or more partnerships, the resulting partnership shall, for purposes of this section, be considered the continuation of any merging or consolidating partnership whose members own an interest of more than 50 percent in the capital and profits of the resulting partnership.

(B) Division of a partnership

In the case of a division of a partnership into two or more partnerships, the resulting partnerships (other than any resulting partnership the members of which had an interest of 50 percent or less in the capital and profits of the prior partnership) shall, for purposes of this section, be considered a continuation of the prior partnership.

(Aug. 16, 1954, ch. 736, 68A Stat. 244; Pub. L. 115–97, title I, § 13504(a), Dec. 22, 2017, 131 Stat. 2141.)Editorial NotesAmendments

2017—Subsec. (b)(1). Pub. L. 115–97 struck out dash after “only if” and subpar. (A) designation before “no part” and struck out subpar. (B) which read as follows: “within a 12-month period there is a sale or exchange of 50 percent or more of the total interest in partnership capital and profits”.

Statutory Notes and Related SubsidiariesEffective Date of 2017 Amendment

Amendment by Pub. L. 115–97 applicable to partnership taxable years beginning after Dec. 31, 2017, see section 13504(c) of Pub. L. 115–97, set out as a note under section 168 of this title.

Notes of Decisions
Cited in 18 cases, 1960–2017 · leading case: 926 N. Ardmore Ave., LLC v. Cnty. of L. A., 396 P.3d 1036 (Cal. 2017).
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926 N. Ardmore Ave., LLC v. Cnty. of L. A., 396 P.3d 1036 (Cal. 2017). · cites it 2× “" ( 26 U.S.C. § 708 (b)(1)(B).) If an existing partnership is not terminated, it is "continuing.”
Garcia v. Foulger Pratt Dev., Inc., 845 A.2d 16 (Md. Ct. Spec. App. 2003). · cites it 3× “” See 26 U.S.C. § 708 (b)(2)(B). 10 Lastly, Garcia argues that Paragraph 4.”
Bakersfield Energy Partners, LP v. Comm'r, 568 F.3d 767 (9th Cir. 2009). “See 26 U.S.C. § 708 (b)(1)(B). Third, the new Bakersfield partnership made use of certain tax provisions that allow a partnership to elect to increase its basis in partnership assets following a transfer of a partnership interest.”
CC & F W. Operations Ltd. P'ship v. Comm'r, 273 F.3d 402 (1st Cir. 2001). “As a result of the sale, each of the twelve partnerships underwent a tax termination under 26 U.S.C. § 708 (b)(1)(B) and submitted a final tax return for the abbreviated tax year.”
Norman & Arlene Rodman, Appellants-Cross-Appellees v. Comm'r of Internal Revenue, Appellee-Cross-Appellant, 542 F.2d 845 (2d Cir. 1976). “Further, there seems to be no dispute that the partnership terminated in 1958 within the meaning of § 708(b)(1)(A) of the Code, 26 U.S.C. § 708 (b)(1)(A), because no part of the partnership’s “business, financial operation or venture continue[d] to be carried on by any of its…”
Kiesner v. Internal Revenue Serv. (In Re Kiesner), 194 B.R. 452 (Bankr. E.D. Wis. 1996). · cites it 3× “§ 346 (c)(1); 26 U.S.C. § 708 (a). For purposes of federal income tax, the commencement of a bankruptcy case by either a partner or a partnership does not alter the taxpayer status of a partnership.”
In Re Samoset Assocs., 14 B.R. 408 (Bankr. D. Me. 1981). “1980); 26 U.S.C. § 708 (b)(1)(A) & (B); 26 C.F.R.”
Nevada Partners Fund, L.L.C. v. United States, 720 F.3d 594 (5th Cir. 2013). “See 26 U.S.C. §§ 708 (b)(1)(B), 761(e); see also 26 C.”
Calvin v. Siegal (In Re Siegal), 190 B.R. 639 (Bankr. D. Ariz. 1996). “See, 26 U.S.C. § 708 ; See, LaSala, Partner Bankruptcy and Partnership Dissolution: Protecting the Terms of the Contract and Ensuring Predictability, 59 Fordham L.”
Pine Creek, LLC v. Pine Mount, LLC, 558 S.E.2d 44 (Ga. Ct. App. 2001). · cites it 8× “, the breach of the prohibition against transfers that would result in the termination of Pine Creek under tax code 26 USC § 708 for tax purposes (which Pine Mount claimed occurred as a result of the September 1997 Madison Ventures' transfer to Stephens, Inc.”
Victor A. Miller & Beatrice A. Miller v. Comm'r of Internal Revenue, 285 F.2d 843 (10th Cir. 1960). “708, 26 U.S.C.A. § 708 : “(a) For purposes of this subchapter, an existing partnership shall be considered as continuing if it is not terminated.”
Ashland v. Comm'r, 584 F. App'x 573 (9th Cir. 2014). “26 U.S.C. § 708 . The Ashlands assert that, even if Airport Plaza existed in 2002, it was not a pass-thru partner of Cutler.”
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