# Ark. Code Ann. § 26-51-405: Partnership income

> Arkansas · Statutes · In force

URL: https://www.frixlaw.com/law-library/statutes/STATE_AR_T26_C51_S4_S26-51-405

## Section

- **Citation:** Ark. Code Ann. § 26-51-405
- **Heading:** Partnership income
- **Jurisdiction:** Arkansas
- **Kind:** Statutes
- **Status:** In force
- **Text as of:** August 14, 2026
- **Source:** Compiled text
- **Location:** AR Code / Title 26 / Chapter 51 / Subchapter 4 / Section 26-51-405

## Text

(a) An individual carrying on business as a partner in a partnership shall be liable for income tax only in his or her individual capacity and shall include in his or her gross income the distributive share of the net income or net loss of the partnership received by him or her or distributable to him or her during the income year. (b) The partner shall report all deductions or credits distributable to him or her personally as a partner in the partnership. (c) A partner's distributive share of partnership loss shall be allowed only to the extent of the adjusted basis of the partner's interest in the partnership at the end of the partnership year in which the loss occurred. (d) Any excess of the loss over the basis shall be allowed as a deduction at the end of the partnership year in which the excess is repaid to the partnership. Acts 1929, No. 118, Art. 3, § 9; Pope's Dig., § 14032; A.S.A. 1947, § 84-2012; Acts 1987, No. 382, § 12.

(a) An individual carrying on business as a partner in a partnership shall be liable for income tax only in his or her individual capacity and shall include in his or her gross income the distributive share of the net income or net loss of the partnership received by him or her or distributable to him or her during the income year.

(b) The partner shall report all deductions or credits distributable to him or her personally as a partner in the partnership.

(c) A partner's distributive share of partnership loss shall be allowed only to the extent of the adjusted basis of the partner's interest in the partnership at the end of the partnership year in which the loss occurred.

(d) Any excess of the loss over the basis shall be allowed as a deduction at the end of the partnership year in which the excess is repaid to the partnership.

Acts 1929, No. 118, Art. 3, § 9; Pope's Dig., § 14032; A.S.A. 1947, § 84-2012; Acts 1987, No. 382, § 12.

## Nearby sections

- [Ark. Code Ann. § 26-51-401 Tax year - Accounting method](https://www.frixlaw.com/law-library/statutes/STATE_AR_T26_C51_S4_S26-51-401.md)
- [Ark. Code Ann. § 26-51-402 Tax year - Basis for determining liability](https://www.frixlaw.com/law-library/statutes/STATE_AR_T26_C51_S4_S26-51-402.md)
- [Ark. Code Ann. § 26-51-403 Income generally](https://www.frixlaw.com/law-library/statutes/STATE_AR_T26_C51_S4_S26-51-403.md)
- [Ark. Code Ann. § 26-51-404 Gross income generally](https://www.frixlaw.com/law-library/statutes/STATE_AR_T26_C51_S4_S26-51-404.md)
- [Ark. Code Ann. § 26-51-405 Partnership income](https://www.frixlaw.com/law-library/statutes/STATE_AR_T26_C51_S4_S26-51-405.md)
- [Ark. Code Ann. § 26-51-406 Income to beneficiaries of trusts and estates](https://www.frixlaw.com/law-library/statutes/STATE_AR_T26_C51_S4_S26-51-406.md)
- [Ark. Code Ann. § 26-51-407 Financial institutions](https://www.frixlaw.com/law-library/statutes/STATE_AR_T26_C51_S4_S26-51-407.md)
- [Ark. Code Ann. § 26-51-408 Dividends of financial institutions taxable](https://www.frixlaw.com/law-library/statutes/STATE_AR_T26_C51_S4_S26-51-408.md)
- [Ark. Code Ann. § 26-51-409 Federal Subchapter S adopted](https://www.frixlaw.com/law-library/statutes/STATE_AR_T26_C51_S4_S26-51-409.md)
- [Ark. Code Ann. § 26-51-410 Inventory](https://www.frixlaw.com/law-library/statutes/STATE_AR_T26_C51_S4_S26-51-410.md)
- [Ark. Code Ann. § 26-51-411 Gain or loss - Sale of property](https://www.frixlaw.com/law-library/statutes/STATE_AR_T26_C51_S4_S26-51-411.md)
- [Ark. Code Ann. § 26-51-412 Gain or loss - Exchange of property](https://www.frixlaw.com/law-library/statutes/STATE_AR_T26_C51_S4_S26-51-412.md)
- [Ark. Code Ann. § 26-51-413 Corporate liquidations](https://www.frixlaw.com/law-library/statutes/STATE_AR_T26_C51_S4_S26-51-413.md)
- [Ark. Code Ann. § 26-51-414 Deferred compensation plans](https://www.frixlaw.com/law-library/statutes/STATE_AR_T26_C51_S4_S26-51-414.md)

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Source: Frix Law Library, https://www.frixlaw.com/law-library/statutes/STATE_AR_T26_C51_S4_S26-51-405. Check the current official text before relying on it. Not legal advice.