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What is a simple definition - 1065, Sch B, question 21, partnership in 1.721(c)-1T(b)(14)?
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It is exactly as the reg defines it. Questions are whether the partnership has any built-in gain property other than excepted properties that were transferred, whether there is a related foreign partner by directly or indirect ownership, and whether the 80% threshold is met.
(i)In general.— A partnership (domestic or foreign) is a section 721(c) partnership if there is a contribution of section 721(c) property to the partnership and, after the contribution and all transactions related to the contribution—
(A) A related foreign person with respect to the U.S. transferor is a direct or indirect partner in the partnership; and
(B) The U.S. transferor and related persons own 80 percent or more of the interests in partnership capital, profits, deductions, or losses.
(ii)Special rule for tiered partnerships.— A partnership described in §1.721(c)-3T(d)(1) or (2) is deemed to be a section 721(c)partnership for purposes of the gain deferral method.
(i)In general.— Section 721(c) property is property, other than excluded property, with built-in gain that is contributed to a partnership by a U.S. transferor, including pursuant to a contribution described in §1.721(c)-2T(d) (partnership look-through rule). If the U.S. transferor is treated as contributing its share of property to a partnership pursuant to §1.721(c)-2T(d), the entire property will be section 721(c) property.
(ii)Special rule for tiered partnerships.—Property described in §1.721(c)-3T(d)(1)(ii) and an interest in a partnership described in§1.721(c)-3T(d)(2)(ii) is deemed to be section 721(c) property.
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