7 September 2010 Internal T.I. 2010-0372191I7 F - Société de personnes - partage d'une perte -- summary under Section 96

A general partnership (SENC), which was generating losses, paid an amount in the year to one of the three equal partners (an individual). The Directorate stated that, in accordance with ITTN No. 30, “any remuneration paid to a partner for work performed in the course of partnership business may properly be considered a distribution of income or a withdrawal of capital and is not deductible in computing a partnership's income,” and that here, the amount was a non-deductible capital withdrawal.