Ezel / IRS Rulings / 1139009
Chief Counsel Advice 1139009 Released September 30, 2011 Advice

CCA 1139009: IRS treated the section 183 issue as a partnership item

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This page covers one taxpayer's ruling from 2011, 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 2011
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 concluded that applying IRC § 183 was a partnership item under Treas. Reg. § 301.6231(a)(3)-1(b). The advice viewed the result as favorable to the taxpayer because, without § 183, a partnership deduction could be disallowed in full under §§ 162 and 165 if the activity was not engaged in for profit. Section 183 could allow deductions for a not-for-profit activity up to the income generated by that activity.

Ruling snapshot

  • Question: Was application of IRC § 183 a partnership item, and had the issue been handled appropriately?
  • Outcome: advice given
  • Key authorities: IRC §§ 183, 162, and 165; Treas. Reg. § 301.6231(a)(3)-1(b)

Full text (IRS public release)

ID: CCA_2011091909414537 Number: 201139009
Release Date: 9/30/2011
Office: ----------
UILC: 6231.03-00

From: --------------------
Sent: Monday, September 19, 2011 9:41:51 AM
To: -------------------------
Cc: ------------
Subject: RE: 183 and TEFRA

The application of section 183 is a partnership item. Treas. Reg. 301.6231(a)(3)-1(b).
This is a taxpayer favorable conclusion since otherwise a partnership deduction would be
disallowed in its entirety under sections 162 and 165 if not engaged in for profit. Section
183 allows the deduction in activities not engaged in for profit up to the amount of income
generated from that activity.

So you treated the issue appropriately.

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