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26 U.S.C. § 709 - U.S. Code - Unannotated Title 26. Internal Revenue Code § 709. Treatment of organization and syndication fees

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(a)?General rule.--Except as provided in subsection (b), no deduction shall be allowed under this chapter to the partnership or to any partner for any amounts paid or incurred to organize a partnership or to promote the sale of (or to sell) an interest in such partnership.

(b)?Deduction of organization fees.--

(1)?Allowance of deduction.--If a partnership elects the application of this subsection (in accordance with regulations prescribed by the Secretary) with respect to any organizational expenses--

(A)?the partnership shall be allowed a deduction for the taxable year in which the partnership begins business in an amount equal to the lesser of--

(i)?the amount of organizational expenses with respect to the partnership, or

(ii)?$5,000, reduced (but not below zero) by the amount by which such organizational expenses exceed $50,000, and

(B)?the remainder of such organizational expenses shall be allowed as a deduction ratably over the 180-month period beginning with the month in which the partnership begins business.

(2)?Dispositions before close of amortization period.--In any case in which a partnership is liquidated before the end of the period to which paragraph (1)(B) applies, any deferred expenses attributable to the partnership which were not allowed as a deduction by reason of this section may be deducted to the extent allowable under section 165.

(3)?Organizational expenses defined.--The organizational expenses to which paragraph (1) applies, are expenditures which--

(A)?are incident to the creation of the partnership;

(B)?are chargeable to capital account; ?and

(C)?are of a character which, if expended incident to the creation of a partnership having an ascertainable life, would be amortized over such life.

Cite this article: FindLaw.com - 26 U.S.C. § 709 - U.S. Code - Unannotated Title 26. Internal Revenue Code § 709. Treatment of organization and syndication fees - last updated January 01, 2018 | https://codes.findlaw.com/us/title-26-internal-revenue-code/26-usc-sect-709/


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