Ezel / IRS Rulings / 1039032
Chief Counsel Advice 1039032 Released October 1, 2010 Advice

Federal law determines partnership status for federal tax purposes

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This page covers one taxpayer's ruling from 2010, 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 2010
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 resolved one taxpayer's situation on its specific facts, 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 Advice addresses whether an individual is a partner for federal tax purposes and whether she is a general or limited partner. The advice states that federal law controls partner status for federal tax purposes, while state law controls whether the person is a general or limited partner. It also concludes that the individual probably retained distribution rights because the grantor trust through which she held the interest was likely disregarded for federal tax purposes. The issues appeared moot because a tax matters partner was not needed.

Ruling snapshot

  • Question: Which law determines partner status and whether a partner is general or limited for federal tax purposes?
  • Outcome: Advice given
  • Key authorities: IRC § 6231

Full text (IRS public release)

ID: CCA_2010090108480737 Number: 201039032
Release Date: 10/1/2010
Office: ----------
UILC: 6231.02-00

From: -------------------
Sent: Wednesday, September 01, 2010 8:48:13 AM
To: --------------------------
Cc: ------------------------------------------------------
Subject: RE: TEFRA question ---------

Federal law controls whether Mom is a partner for federal tax purposes under the Supreme Court cases I
previously cited. State law controls whether she is general or limited.

She actually did not lose the right to distributions since the grantor trust through whom she holds her
interest is probably a disregarded entity for federal tax purposes.

These issues appear moot since we don't need a TMP. -----------------------------------------------------------------

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