---
kind: "section"
citation: "26 U.S.C. § 708"
title: "26"
title_heading: "Internal Revenue Code"
number: "708"
heading: "Continuation of partnership"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/26/708"
units:
  - "Subtitle A — Income Taxes"
  - "Chapter 1 — Normal Taxes and Surtaxes"
  - "Subchapter K — Partners and Partnerships"
  - "Part I — Determination of Tax Liability"
---

# §708. Continuation of partnership

- (a) **General rule—** For purposes of this subchapter, an existing [partnership](/usc/26/761.md?p=a) shall be considered as continuing if it is not terminated.
- (b) **Termination—**
  - (1) **General rule—** For purposes of [subsection (a)](#a), a [partnership](/usc/26/761.md?p=a) shall be considered as terminated only if no part of any business, financial operation, or venture of the [partnership](/usc/26/761.md?p=a) continues to be carried on by any of its [partners](/usc/26/761.md?p=b) in a [partnership](/usc/26/761.md?p=a).
  - (2) **Special rules—**
    - (A) **Merger or consolidation—** In the case of the merger or consolidation of two or more [partnerships](/usc/26/761.md?p=a), the resulting [partnership](/usc/26/761.md?p=a) shall, for purposes of this section, be considered the continuation of any merging or consolidating [partnership](/usc/26/761.md?p=a) whose members own an [interest](/usc/26/856.md?p=f-1) of more than 50 percent in the capital and profits of the resulting [partnership](/usc/26/761.md?p=a).
    - (B) **Division of a partnership—** In the case of a division of a [partnership](/usc/26/761.md?p=a) into two or more [partnerships](/usc/26/761.md?p=a), the resulting [partnerships](/usc/26/761.md?p=a) (other than any resulting [partnership](/usc/26/761.md?p=a) the members of which had an [interest](/usc/26/856.md?p=f-1) of 50 percent or less in the capital and profits of the prior [partnership](/usc/26/761.md?p=a)) shall, for purposes of this section, be considered a continuation of the prior [partnership](/usc/26/761.md?p=a).

## Source credit

(Aug. 16, 1954, ch. 736, 68A Stat. 244; Pub. L. 115–97, title I, § 13504(a), Dec. 22, 2017, 131 Stat. 2141.)

## Notes

### Editorial Notes

### Amendments

2017—Subsec. (b)(1). Pub. L. 115–97 struck out dash after “only if” and subpar. (A) designation before “no part” and struck out subpar. (B) which read as follows: “within a 12-month period there is a sale or exchange of 50 percent or more of the total interest in partnership capital and profits”.

### Statutory Notes and Related Subsidiaries

### Effective Date of 2017 Amendment

Amendment by Pub. L. 115–97 applicable to partnership taxable years beginning after Dec. 31, 2017, see section 13504(c) of Pub. L. 115–97, set out as a note under section 168 of this title.