Chapter 10. Partners And Partnerships of California Revenue And Taxation Code >> Division 2. >> Part 10. >> Chapter 10.

Subchapter K of Chapter 1 of Subtitle A of the Internal Revenue Code, relating to partners and partnerships, shall apply, except as otherwise provided.

Notwithstanding the provisions of Section 701 of the Internal Revenue Code, relating to partners, not partnerships, subject to tax, a partnership, as an entity shall be subject to Chapter 10.5 (commencing with Section 17935), relating to tax on limited partnerships, Chapter 10.6 (commencing with Section 17941), relating to tax on limited liability companies, and Chapter 10.7 (commencing with Section 17951), relating to tax on limited liability partnerships.

Section 703(a)(2) of the Internal Revenue Code is modified to additionally provide that the deduction for taxes provided in Section 164(a) of the Internal Revenue Code with respect to taxes, described in Section 18006, paid to another state shall not be allowed to the partnership.

For purposes of computing "taxable income of a nonresident or part-year resident" under paragraph (1) of subdivision (i) of Section 17041, in the case of a nonresident partner, guaranteed payments, as defined by Section 707(c) of the Internal Revenue Code, shall be included in that computation as gross income from sources within this state in the same manner as if those payments were a distributive share of that partnership.

The term "unrealized receivables," as defined by Section 751 (c) of the Internal Revenue Code, shall not include any of the following:
  (a) Stock in certain foreign corporations, as described in Section 1248 of the Internal Revenue Code.
  (b) Oil, gas, or geothermal property, described in Section 1254 of the Internal Revenue Code.

Section 751(d)(3) of the Internal Revenue Code, relating to appreciated inventory items subject to tax as a gain on foreign investment company stock, does not apply.

Section 751(e) of the Internal Revenue Code, relating to the limitation on tax attributable to deemed sales of Section 1248 stock, shall not apply.

For purposes of this part and Part 11 (commencing with Section 23001), any election relating to the computation of depreciation shall be made by the partnership and each partner shall take into account his or her distributive share of the depreciation amount computed in accordance with that election.

Part IV of Subchapter K of Chapter 1 of Subtitle A of the Internal Revenue Code (commencing with Section 771 of the Internal Revenue Code), shall not apply, except as otherwise provided.