Ezel / IRS Rulings / 200915039

CCA 200915039: IRA trust ownership generally defeated the small-partnership exception

Number
200915039
Outcome
Advice
Document type
Chief Counsel Advice
IRS subject
Exception for Small Partnerships
Topics
Procedure, penalties, and administration
Code sections
§ 408, § 6231
Ruling dated
November 25, 2008
Publicly released
April 10, 2009
Source
View Official PDF

Apply this to your situation

This page covers legal advice the IRS Office of Chief Counsel wrote for IRS staff, issued in 2009, which can't be cited as precedent. Ask about your situation and see what the current Code and IRS guidance say, with citations.

Currency note: this determination was released in 2009
Statutory amendments, regulation changes, court decisions, or later IRS guidance may have changed the analysis since then. Treat this page as historical context, not current tax advice. Verify current law before relying on any specific rule, threshold, or position mentioned here.
Not precedent. Under 26 U.S.C. § 6110(k)(3), this written determination may not be used or cited as precedent. It is advice from the IRS Office of Chief Counsel to IRS personnel on the facts they presented, and identifying details were redacted by the IRS before release. The official IRS release (linked on this page as a PDF) is the authoritative source.
About this page: The plain-English summary and ruling snapshot below were written by Ezel based on the official IRS release. The full text is the IRS's own document.
View official IRS release (PDF)

Plain-English summary

An IRS attorney considered whether a partnership involving an individual retirement account qualified for the small-partnership exception. An IRA is a trust under section 408, and its custodian is treated as a trustee for federal-law purposes. Because a trust is a pass-through partner, its participation generally prevents the partnership from using that exception.

Ruling snapshot

  • Question: Does an IRA's interest in a partnership generally prevent use of the small-partnership exception?
  • Outcome: Advice given: yes, because the IRA is a trust and therefore a pass-through partner.
  • Key authorities: IRC §§ 408, 6231; Primco v. Commissioner.

Full text (IRS public release)

ID: CCA_2008112516013537 Number: 200915039
Release Date: 4/10/2009
Office: --------------
UILC: 6231.01-01

From: -------------------
Sent: Tuesday, November 25, 2008 4:01:37 PM
To: --------------------
Cc: -----------
Subject: RE: Small Partnerships & IRA Accounts

An IRA is a trust (see I.R.C. 408) and its custodian is a trustee for purposes of federal law. This generally
takes it out of the small partnership exception since a trust is a pass-thru partner. See Primco v.
Commissioner.

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