PARTNERSHIP INTERESTS CREATED BY GIFT.

SEC. 1102. PARTNERSHIP INTERESTS CREATED BY GIFT. (a) In General.—Section 761(b) of the Internal Revenue Code of 1986 is amended by adding at the end the following: “In the case of a capital interest in a partnership in which capital is a material income-producing factor, whether a person is a partner with respect to such interest shall be determined without regard to whether such interest was derived by gift from any other person.”. (b) [26 U.S.C. 704] Conforming amendments.—Section 704(e) of such Code is amended— (1) by striking paragraph (1) and by redesignating paragraphs (2) and (3) as paragraphs (1) and (2), respectively, (2) by striking “this section” in paragraph (2) (as so redesignated) and inserting “this subsection”, and (3) by striking “Family Partnerships” in the heading and inserting “Partnership Interests Created by Gift”. (c) [26 U.S.C. 704] Effective Date.—The amendments made by this section shall apply to partnership taxable years beginning after December 31, 2015.