§207.  Transactions between partner and partnership

A.  Partner not acting in capacity as partner.  If a partner engages in a transaction with a partnership other than in his capacity as member of such partnership, the transaction shall, except as otherwise provided in this Section, be considered as occurring between the partnership and one who is not a partner.  

B.  Certain sales or exchanges of property with respect to controlled partnerships.  

(1)  Losses disallowed.  No deduction shall be allowed in respect of losses from sales or exchanges of property (other than an interest in the partnership), directly or indirectly, between:

(a)  a partnership and a partner owning, directly or indirectly, more than 50 per cent of the capital interest, or the profits interest, in such partnership, or

(b)  two partnerships in which the same persons own, directly, or indirectly, more than 50 per cent of the capital interests or profits interests.

C.  Guaranteed payments.  To the extent determined without regard to the income of the partnership, payments to a partner for services or the use of capital shall be considered as made to one who is not a member of the partnership, but only for the purposes of R.S. 47:42 (relating to gross income) and R.S. 47:62 (relating to trade or business expenses).  

Added by Acts 1958, No. 441, §2.