IRS Publication 541 — Partnerships
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The following sections contain general information about partnerships.
Organizations Classified as Partnerships
An unincorporated organization with two or more members is generally classified as a partnership for federal tax purposes if its members carry on a trade, business, financial operation, or venture and divide its profits. However, a joint undertaking merely to share expenses is not a partnership. For example, co -ownership of property maintained and rented or leased is not a partnership unless the co-owners provide services to the tenants. The rules you must use to determine whether an organization is classified as a partnership changed for organizations formed after 1996. Organizations formed after 1996. An organization formed after 1996 is classified as a partnership for federal tax purposes if it has two or more members and it is none of the following.
• An organization formed under a federal or state law that refers to it as incorporated or as a corporation, body corporate, or body politic.
• An organization formed under a state law that refers to it as a joint-stock company or joint-stock association.
• An insurance company.
• Certain banks. 334 505 515 537 538 544 551 925 946 2 Publication 541 (12-2025)
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