Global Definitions Database

Internal Revenue Code (IRC) procedures relating to capital account maintenance rules and rules regarding a partnership's right to adjust capital accounts to reflect unrealized appreciation and depreciation in the value of partnership assets; provides that a partner's distributive share of income, gain, loss, deduction, or credit is determined in accordance with the partner's interest in the partnership if the partnership agreement does not provide as to the partner's distributive shares of these items, or the allocation to a partner of these items under the agreement does not have substantial economic effect; regulations under IRC section 704 provide extensive rules for determining whether allocations under an agreement have substantial economic effect.