Page:United States Statutes at Large Volume 111 Part 1.djvu/1026

 Ill STAT. 1002 PUBLIC LAW 105-34—AUG. 5, 1997 "SEC. 771. APPLICATION OF SUBCHAPTER TO ELECTING LARGE PART- NERSHIPS. "The preceding provisions of this subchapter to the extent inconsistent with the provisions of this part shall not apply to an electing large partnership and its partners. "SEC. 772. SIMPLIFIED FLOW-THROUGH. "(a) GENERAL RULE.— In determining the income tax of a partner of an electing large partnership, such partner shall take into account separately such partner's distributive share of the partnership's— "(1) taxable income or loss from passive loss limitation activities, ^x "(2) taxable income or loss from other activities, "(3) net capital gain (or net capital loss)— "(A) to the extent allocable to passive loss limitation activities, and "(B) to the extent allocable to other activities, "(4) tax-exempt interest, "(5) applicable net AMT adjustment separately computed for— "(A) passive loss limitation activities, and "(B) other activities, "(6) general credits, "(7) low-income housing credit determined under section 42, "(8) rehabilitation credit determined under section 47, "(9) foreign income taxes, "(10) the credit allowable under section 29, and "(11) other items to the extent that the Secretary determines that the separate treatment of such items is appropriate. "(b) SEPARATE COMPUTATIONS.— In determining the amounts required under subsection (a) to be separately tsiken into account by any partner, this section and section 773 shall be applied separately with respect to such partner by taking into account such partner's distributive share of the items of income, gain, loss, deduction, or credit of the partnership. Applicability. "(c) TREATMENT AT PARTNER LEVEL, — "(1) IN GENERAL.—Except as provided in this subsection, rules similar to the rules of section 702(b) shall apply to any partner's distributive share of the amounts referred to in subsection (a). " (2) INCOME OR LOSS FROM PASSIVE LOSS LIMITATION ACTIVI- TIES.—For purposes of this chapter, any partner's distributive share of any income or loss described in subsection (a)(1) shall be treated as an item of income or loss (as the case may be) from the conduct of a trade or business which is a single passive activity (as defined in section 469). A similar rule shall apply to a partner's distributive share of amounts referred to in paragraphs (3)(A) and (5)(A) of subsection (a). " (3) INCOME OR LOSS FROM OTHER ACTIVITIES.— "(A) IN GENERAL.— For purposes of this chapter, any partner's distributive share of any income or loss described in subsection (a)(2) shall be treated as an item of income or expense (as the case may be) with respect to property held for investment.

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