(A) In general Net capital gain, long-term capital gain, and long-term capital loss, with respect to any investment services partnership interest for any taxable year, shall be determined under section 1222, except that such section shall be applied— (i) without regard to the recharacterization of any item as ordinary income or ordinary loss under this section, (ii) by only taking into account items of gain and loss taken into account by the holder of such interest under section 702 (other than subsection (a)(9) thereof) with respect to such interest for such taxable year, and (iii) by treating property which is taken into account in determining gains and losses to which section 1231 applies as capital assets held for more than 1 year. (B) Net capital loss The term net capital loss means the excess of the losses from sales or exchanges of capital assets over the gains from such sales or exchanges. Rules similar to the rules of clauses (i) through (iii) of subparagraph (A) shall apply for purposes of the preceding sentence. (5) Special rule for dividends Any dividend allocated with respect to any investment services partnership interest shall not be treated as qualified dividend income for purposes of section 1(h). (6) Special rule for qualified small business stock Section 1202 shall not apply to any gain from the sale or exchange of qualified small business stock (as defined in section 1202(c)) allocated with respect to any investment services partnership interest. (b) Dispositions of partnership interests (1) Gain (A) In general Any gain on the disposition of an investment services partnership interest shall be— (i) treated as ordinary income, and (ii) recognized notwithstanding any other provision of this subtitle. (B) Gift and transfers at death In the case of a disposition of an investment services partnership interest by gift or by reason of death of the taxpayer— (i) subparagraph (A) shall not apply, (ii) such interest shall be treated as an investment services partnership interest in the hands of the