Rev. Rul. 77-320

Section 183(a) of the Internal Revenue Code of 1954 provides that, in the case of an activity engaged in by an individual or an electing small business corporation (as defined in section 1371(b)), if such activity is not engaged in for profit, no deduction attributable to such activity is allowed, except as provided in section 183. Section 703(a) provides in general that the taxable income of a partner shall be computed in the same manner as in the case of an individual.

Held, section 183 of the Code applies to the activities of a partnership, and the provisions of section 183 are applied at the partnership level and reflected in the partners' distributive shares.