Ezel / IRS Rulings / 200928034

CCA 200928034: Passive-activity classification and grouping are partnership-level items

Number
200928034
Outcome
Advice
Document type
Chief Counsel Advice
IRS subject
Partnership Item
Topics
Procedure, penalties, and administration
Code sections
§ 6231
Ruling dated
May 27, 2009
Publicly released
July 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

Chief Counsel advised that the classification and grouping of passive activities conducted by a partnership are partnership items determined at the partnership level. Those determinations are reported on the partnership return, which includes Schedule K-1. Each partner's Schedule K-1 should separately reflect that partner's share of income or loss from each grouped activity, such as rental, other trade or business, or portfolio activity.

Ruling snapshot

  • Question: Where should a partnership's passive-activity classifications and groupings be determined and reported?
  • Outcome: Advice given that they are partnership-level items reported through the partnership return and Schedules K-1
  • Key authorities: IRC § 6231; Estate of Quick v. Commissioner

Full text (IRS public release)

ID: CCA_2009052715074137 Number: 200928934

Release Date: 7/10/2009

Office: -------------

UILC: 6231.03-00

From: --------------------

Sent: Wednesday, May 27, 2009 3:07:42 PM

To: -------------------

Cc: ------------------------------------------------------

Subject: RE: PAL

Under Estate of Quick v. Commissioner, the classification and grouping of the passive activity engaged in by the partnership is a partnership item determined at the partnership level and reported on the partnership return. The Schedule K-1 is part of the partnership return, so that it can be reported there. The Forms k-1 issued to the partners should reflect each partners share of the income/loss from each separate grouped activity, e.g., rental activity, other trade or business or portfolio activity.

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