La. R.S. 47:204 — Partner's distributive share

A. Effect of partnership agreement. A partner's distributive share of
income, gain, loss, deduction, or credit shall, except as otherwise provided in
this Section, be determined by the partnership agreement.
B. Distributive share determined by income or loss ratio. A partner's
distributive share of any item of income, gain, loss, or deduction shall be
determined in accordance with his distributive share of taxable income or loss
of the partnership, as described in R.S. 47:202(A)(4), for the taxable year, if:
(1) the partnership agreement does not provide as to the partner's
distributive share of such item, or
(2) the principal purpose of any provision in the partnership agreement
with respect to the partner's distributive share of such item is the avoidance or
evasion of any tax imposed by this Chapter.
C. Contributed property.
(1) General rule. In determining a partner's distributive share of items
described in R.S. 47:202(A), depreciation, depletion, or gain or loss with
respect to property contributed to the partnership by a partner shall, except to
the extent otherwise provided in Paragraph (2) or (3) of this Subsection be
allocated among the partners in the same manner as if such property had been
purchased by the partnership.
(2) Effect of partnership agreement. If the partnership agreement so
provides, depreciation, depletion, or gain or loss with respect to property
contributed to the partnership by a partner shall, under regulations prescribed
by the collector, be shared among the partners so as to take account of the
variation between the basis of the property to the partnership and its fair
market value at the time of contribution.
(3) Undivided interests. If the partnership agreement does not provide
otherwise, depreciation, depletion, or gain or loss with respect to undivided
interests in property contributed to a partnership shall be determined as though
such undivided interests had not been contributed to the partnership. This
paragraph shall apply only if all of the partners had undivided interests in such
property prior to making the contribution and their interests in the capital and
profits of the partnership correspond with such undivided interests.
D. Limitation on allowance of losses. A partner's distributive share of
partnership loss (including capital loss) shall be allowed only to the extent of
the adjusted basis of such partner's interest in the partnership at the end of the
partnership year in which such loss occurred. Any excess of such loss over
such basis shall be allowed as a deduction at the end of the partnership year in
which such excess is repaid to the partnership.
E. Family partnerships.
(1) Recognition of interest created by purchases or gift. A person shall
be recognized as a partner for purposes of this Subtitle if he owns a capital
interest in a partnership in which capital is a material income-producing factor,
whether or not such interest was derived by purchases or gift from any other
person.
(2) Distributive share of donee includible in gross income. In the case
of any partnership interest created by gift, the distributive share of the donee
under the partnership agreement shall be includible in his gross income, except
to the extent that such share is determined without allowance of reasonable
compensation for services rendered to the partnership by the donor, and except
to the extent that the portion of such share attributable to donated capital is
proportionately greater than the share of the donor attributable to the donor's
capital. The distributive share of a partner in the earnings of the partnership
shall not be diminished because of absence due to military service.
(3) Purchase of interest by member of family. For purpose of this
Section, an interest purchased by one member of a family from another shall
be considered to be created by gift from the seller, and the fair market value
of the purchased interest shall be considered to be donated capital. The
"family" of any individual shall include only his spouse, ancestors, and lineal
descendants, and any trusts for the primary benefit of such persons.