# 26 U.S.C. § 703: Partnership computations

Source: OLRC release point 119-134 <https://uscode.house.gov/us/usc/119-134/t26/s703>. Cite pinpoints as 26 U.S.C. § 703(a)(1).

## § 703(a) Income and deductions

The taxable income of a partnership shall be computed in the same manner as in the case of an individual except that—

**§ 703(a)(1)** the items described in section 702(a) shall be separately stated, and

**§ 703(a)(2)** the following deductions shall not be allowed to the partnership:

**§ 703(a)(2)(A)** the deductions for personal exemptions provided in section 151,

**§ 703(a)(2)(B)** the deduction for taxes provided in section 164(a) with respect to taxes, described in section 901, paid or accrued to foreign countries and to possessions of the United States,

**§ 703(a)(2)(C)** the deduction for charitable contributions provided in section 170,

**§ 703(a)(2)(D)** the net operating loss deduction provided in section 172,

**§ 703(a)(2)(E)** the additional itemized deductions for individuals provided in part VII of subchapter B (sec. 211 and following), and

**§ 703(a)(2)(F)** the deduction for depletion under section 611 with respect to oil and gas wells.

## § 703(b) Elections of the partnership

Any election affecting the computation of taxable income derived from a partnership shall be made by the partnership, except that any election under—

**§ 703(b)(1)** subsection (b)(5) or (c)(3) of section 108 (relating to income from discharge of indebtedness),

**§ 703(b)(2)** section 617 (relating to deduction and recapture of certain mining exploration expenditures), or

**§ 703(b)(3)** section 901 (relating to taxes of foreign countries and possessions of the United States),

shall be made by each partner separately.

## Regulations

- [Treas. Reg. § 1.703-1](/26/reg/1.703-1.md): Partnership computations. (interprets § 703)

## Leading cases

- [Demirjian v. Commissioner, 54 T.C. 1691 (1970)](https://www.courtlistener.com/opinion/4702897/demirjian-v-commissioner/)
- [Elkins v. Commissioner, 81 T.C. 669 (1983)](https://www.courtlistener.com/opinion/4705911/elkins-v-commissioner/)
- [Brannen v. Commissioner, 78 T.C. 471 (1982)](https://www.courtlistener.com/opinion/4705538/brannen-v-commissioner/)

## Connections

Cites: § 108 Income from discharge of indebtedness; § 151 Allowance of deductions for personal exemptions; § 164 Taxes; § 170 Charitable, etc., contributions and gifts; § 172 Net operating loss deduction; § 611 Allowance of deduction for depletion; § 617 Deduction and recapture of certain mining exploration expenditures; § 702 Income and credits of partner; § 901 Taxes of foreign countries and of possessions of United States

Cited by: § 705 Determination of basis of partner’s interest; § 860C Taxation of residual interests; § 901 Taxes of foreign countries and of possessions of United States; § 1363 Effect of election on corporation; § 1446 Withholding of tax on foreign partners’ share of effectively connected income

Derived from: 1939 § 183(a), (b); 1939 § 183(d); 1939 § 189

## Amendments

- 1954-08-16: [Act Aug. 16, 1954, ch. 736](/26/act/1954-ch736.md), 68A Stat. 240
- 1966-09-12: [Pub. L. 89-570](/26/act/89-570.md), 80 Stat. 764
- 1969-12-30: [Pub. L. 91-172](/26/act/91-172.md), 83 Stat. 633
- 1971-12-10: [Pub. L. 92-178](/26/act/92-178.md), 85 Stat. 523
- 1975-03-29: [Pub. L. 94-12](/26/act/94-12.md), 89 Stat. 53
- 1976-10-04: [Pub. L. 94-455](/26/act/94-455.md), 90 Stat. 1798
- 1977-05-23: [Pub. L. 95-30](/26/act/95-30.md), 91 Stat. 134
- 1980-12-24: [Pub. L. 96-589](/26/act/96-589.md), 94 Stat. 3396
- 1986-10-22: [Pub. L. 99-514](/26/act/99-514.md), 100 Stat. 2249
- 1988-11-10: [Pub. L. 100-647](/26/act/100-647.md), 102 Stat. 3445
- 1993-08-10: [Pub. L. 103-66](/26/act/103-66.md), 107 Stat. 448