Treasury Regulations (26 C.F.R.)
26 CFR § 301.6231(a)(2)-1
Persons whose tax liability is determined indirectly by partnership items.
# (a)
Spouse filing joint return with individual holding a separate interest—(1) In general. Except as otherwise provided in this paragraph (a), a spouse who files a joint return with an individual holding a separate interest in the partnership shall be treated as a partner for purposes of subchapter C of chapter 63 of the Internal Revenue Code. Thus, the spouse who files a joint return with a partner will be permitted to participate in administrative and judicial proceedings.
(2) Counting rules. A spouse who files a joint return with an individual holding a separate interest in the partnership shall not be counted as a partner for purposes of applying section 6223(b) (relating to special rules for partnerships with more than 100 partners) and section 6231(a)(1)(B) (relating to the exception for small partnerships).
(3) Notice rules—(i) In general. Except as provided in paragraph (a)(3)(ii) of this section, for purposes of subchapter C of chapter 63 of the Internal Revenue Code, a spouse who files a joint return with an individual holding a separate interest in the partnership shall be treated as receiving any notice received by the individual holding the separate interest.
(ii) Spouse identified on partnership return or by statement. Paragraph (a)(3)(i) of this section shall not apply to a spouse who files a joint return with an individual holding a separate interest in the partnership if that spouse—
(A) Is identified on the partnership return; or
(B) Is identified as a partner entitled to notice as provided in § 301.6223(c)-1(b).
(4) Conversion of partnership items—(i) Individual holding a separate interest. A spouse who files a joint return with an individual holding a separate interest in the partnership shall cease to be treated as a partner in the partnership under paragraph (a)(1) of this section upon the conversion of the partnership items of the individual holding the separate interest in the partnership to nonpartnership items pursuant to section 6231(b). If each spouse holds a separate interest in the partnership, the previous sentence shall be applied separately with respect to each partnership interest.
(ii) Spouse who files a joint return with an individual holding a separate interest in the partnership. A spouse who files a joint return with an individual holding a separate interest in the partnership shall cease to be treated as a partner in the partnership under paragraph (a)(1) of this section upon the occurrence of an event that would convert the partnership items of the spouse to nonpartnership items if the spouse were the owner of a separate interest.
(iii) Examples. The following examples illustrate the application of paragraph (a)(4) of this section:
Example 1.
Husband owns a separate interest in ABC partnership and files a joint return with Wife. Husband files for bankruptcy. Pursuant to § 301.6231(c)-7, upon filing for bankruptcy, the partnership items of the debtor convert to nonpartnership items. Thus, Husband's partnership items converted to nonpartnership items upon the filing of Husband's bankruptcy petition. Pursuant to paragraph (a)(4)(i) of this section, Wife is no longer treated as a partner of ABC partnership as of the date the partnership items of Husband converted to nonpartnership items.
Example 2.
Wife owns a separate interest in XYZ partnership and files a joint return with Husband. Husband files for bankruptcy. Because the filing of the bankruptcy petition by Husband is an event that would convert Husband's partnership items to nonpartnership items if Husband were the owner of a separate interest, Husband shall no longer be treated as a partner as of the filing of the bankruptcy petition. Pursuant to paragraph (a)(4)(ii) of this section, the partnership items of Wife are not affected by Husband's bankruptcy.
(5) Cross-reference. See § 301.6231(a)(12)-1 for special rules relating to spouses holding a joint interest in a partnership.
# (b) Shareholder of C corporation.
A shareholder of a C corporation (as defined in section 1361(a)(2)) is not a partner in a partnership merely because the C corporation is a partner in that partnership.
# (c) Effective date.
This section is applicable to partnership taxable years beginning on or after October 4, 2001. For years beginning prior to October 4, 2001, see § 301.6231(a)(2)-1T contained in 26 CFR part 1, revised April 1, 2001.
[T.D. 8965, 66 FR 50557, Oct. 4, 2001]
Source: view the official text
In this part (40 sections)
- 301.6226-3 · Adjustments taken into account by partners.
- 301.6226(a)-1 · Principal place of business of partnership.
- 301.6226(b)-1 · 5-percent group.
- 301.6226(e)-1 · Jurisdictional requirement for bringing an action in…
- 301.6226(f)-1 · Scope of judicial review.
- 301.6227-1 · Administrative adjustment request by partnership.
- 301.6227-2 · Determining and accounting for adjustments requested in an…
- 301.6227-3 · Adjustments requested in an administrative adjustment…
- 301.6227(c)-1 · Administrative adjustment request by the tax matters…
- 301.6227(d)-1 · Administrative adjustment request filed on behalf of a…
- 301.6229(b)-1 · Extension by agreement.
- 301.6229(b)-2 · Special rule with respect to debtors in title 11 cases.
- 301.6229(c)(2)-1 · Substantial omission of income.
- 301.6229(e)-1 · Information with respect to unidentified partner.
- 301.6229(f)-1 · Special rule for partial settlement agreements.
- 301.6230(b)-1 · Request that correction not be made.
- 301.6230(c)-1 · Claim arising out of erroneous computation, etc.
- 301.6230(e)-1 · Tax matters partner required to furnish names.
- 301.6231-1 · Notice of proceedings and adjustments.
- 301.6231(a)(1)-1 · Exception for small partnerships.
- 301.6231(a)(2)-1 · Persons whose tax liability is determined indirectly…
- 301.6231(a)(3)-1 · Partnership items.
- 301.6231(a)(5)-1 · Definition of affected item.
- 301.6231(a)(6)-1 · Computational adjustments.
- 301.6231(a)(7)-1 · Designation or selection of tax matters partner.
- 301.6231(a)(7)-2 · Designation or selection of tax matters partner for…
- 301.6231(a)(12)-1 · Special rules relating to spouses.
- 301.6231(c)-1 · Special rules for certain applications for tentative…
- 301.6231(c)-2 · Special rules for certain refund claims based on…
- 301.6231(c)-3 · Limitation on applicability of §§ 301.6231(c)-4 through…
- 301.6231(c)-4 · Termination and jeopardy assessment.
- 301.6231(c)-5 · Criminal investigations.
- 301.6231(c)-6 · Indirect method of proof of income.
- 301.6231(c)-7 · Bankruptcy and receivership.
- 301.6231(c)-8 · Prompt assessment.
- 301.6231(d)-1 · Time for determining profits interest of partners for…
- 301.6231(e)-1 · Effect of a determination with respect to a…
- 301.6231(e)-2 · Judicial decision not a bar to certain adjustments.
- 301.6231(f)-1 · Disallowance of losses and credits in certain cases.
- 301.6232-1 · Assessment, collection, and payment of imputed…