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26 U.S.C. § 721 — Nonrecognition of gain or loss on contribution
Federal law — U.S. Code and appendices · legal_authorities
**(a) General rule** No gain or loss shall be recognized to a partnership or to any of its partners in the case of a contribution of property to the partnership in exchange for an interest in the partnership.
**(b) Special rule** Subsection (a) shall not apply to gain realized on a transfer of property to a partnership which would be treated as an investment company (within the meaning of section 351) if the partnership were incorporated.
**(c) Regulations relating to certain transfers to partnerships** The Secretary may provide by regulations that subsection (a) shall not apply to gain realized on the transfer of property to a partnership if such gain, when recognized, will be includible in the gross income of a person other than a United States person.
**(d) Transfers of intangibles** For regulatory authority to treat intangibles transferred to a partnership as sold, see section 367(d)(3).
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Stable record: federal_law:legal_authorities:record_usc_b2a0c7cedd82c45a01f27320
Source file: Laws/federal/codes/united-states-code/title-26/section-721-nonrecognition-of-gain-or-loss-on-contribution--a11117be64.md
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Source location: Title 26, Chapter 1, § 721; chapter-001-normal-taxes-and-surtaxes.md
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**(a) General rule** No gain or loss shall be recognized to a partnership or to any of its partners in the case of a contribution of property to the partnership in exchange for an interest in the partnership.
**(b) Special rule** Subsection (a) shall not apply to gain realized on a transfer of property to a partnership which would be treated as an investment company (within the meaning of section 351) if the partnership were incorporated.
**(c) Regulations relating to certain transfers to partnerships** The Secretary may provide by regulations that subsection (a) shall not apply to gain realized on the transfer of property to a partnership if such gain, when recognized, will be includible in the gross income of a person other than a United States person.
**(d) Transfers of intangibles** For regulatory authority to treat intangibles transferred to a partnership as sold, see section 367(d)(3).
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Federal law — U.S. Code and appendices · legal_authorities
**(a) In general** Except as provided in regulations, in the case of any transfer of property by a United States person to a foreign estate or trust, for purposes of this subtitle, such transfer shall be treated as a sale or exchange for an amount equal to the fair market value of the property transferred, and the transferor shall recognize as gain the excess of—
(1) the fair market value of the property so transferred, over
(2) the adjusted basis (for purposes of determining gain) of such property in the hands of the transferor.
**(b) Exception** Subsection (a) shall not apply to a transfer to a trust by a United States person to the extent that any person is treated as the owner of such trust under section 671.
**(c) Treatment of trusts which become foreign trusts** If a trust which is not a foreign trust becomes a foreign trust, such trust shall be treated for purposes of this section as having transferred, immediately before becoming a foreign trust, all of its assets to a foreign trust.
Source: Supplied U.S. Code snapshot — release unconfirmed · 26 U.S.C. § 684
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Federal law — U.S. Code and appendices · legal_authorities
The basis of an interest in a partnership acquired by a contribution of property, including money, to the partnership shall be the amount of such money and the adjusted basis of such property to the contributing partner at the time of the contribution increased by the amount (if any) of gain recognized under section 721(b) to the contributing partner at such time.
Source: Supplied U.S. Code snapshot — release unconfirmed · 26 U.S.C. § 722
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Federal law — U.S. Code and appendices · legal_authorities
The basis of property contributed to a partnership by a partner shall be the adjusted basis of such property to the contributing partner at the time of the contribution increased by the amount (if any) of gain recognized under section 721(b) to the contributing partner at such time.
Source: Supplied U.S. Code snapshot — release unconfirmed · 26 U.S.C. § 723
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Federal law — U.S. Code and appendices · legal_authorities
Page 1874
TITLE 26—INTERNAL REVENUE CODE
§ 721
with the month in which the partnership be-
gins business.
(2) Dispositions before close of amortization
period
In any case in which a partnership is liq-
uidated before the end of the period to which
paragraph (1)(B) applies, any deferred expenses
attributable to the partnership which were not
allowed as a deduction by reason of this sec-
tion may be deducted to the extent allowable
under section 165.
(3) Organizational expenses defined
The organizational expenses to which para-
graph (1) applies, are expenditures which—
(A) are incident to the creation of the
partnership;
(B) are chargeable to capital account; and
(C) are of a character which, if expended
incident to the creation of a partnership
having an ascertainable life, would be amor-
tized over such life.
(Added Pub. L. 94–455, title II, § 213(b)(1), Oct. 4,
1976, 90 Stat. 1547; amended Pub. L. 108–357, title
VIII, § 902(c), Oct. 22, 2004, 118 Stat. 1651; Pub. L.
109–135, title IV, § 403(ll), Dec. 21, 2005, 119 Stat.
2632.)
Editorial Notes
AMENDMENTS
2005—Subsec. (b)(1). Pub. L. 109–135 substituted ‘‘part-
nership’’ for ‘‘taxpayer’’ in introductory provisions and
before ‘‘shall be allowed’’ in subpar. (A).
2004—Subsec. (b). Pub. L. 108–357 substituted ‘‘Deduc-
tion’’ for ‘‘Amortization’’ in heading, added par. (2), re-
designated former par. (2) as (3), and amended heading
and text of par. (1) generally. Prior to amendment, text
of par. (1) read as follows: ‘‘Amounts paid or incurred
to organize a partnership may, at the election of the
partnership (made in accordance with regulations pre-
scribed by the Secretary), be treated as deferred ex-
penses. Such deferred expenses shall be allowed as a de-
duction ratably over such period of not
Source: Supplied 2024 U.S. Code historical extraction · 26 U.S.C. § 721
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