Page:United States Statutes at Large Volume 68A.djvu/285

 CH. 1—NORMAL TAXES AND SURTAXES

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PART II—CONTRIBUTIONS, DISTRIBUTIONS, AND TRANSFERS Subpart Subpart Subpart Subpart

A—Contributions to a partnership. B—Distributions by a partnership. C—Transfers of interests in a partnership. D—Provisions common to other subparts.

Subpart A—Contributions to a Partnership Sec. 721. Nonrecognition of gain or loss on contribution. Sec. 722. Basis of contributing partner's interest. Sec. 723. Basis of property contributed to partnership. SEC. 721. NONRECOGNITION OF GAIN OR LOSS ON CONTRIBUTION.

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. SEC. 722. BASIS OF CONTRIBUTING PARTNER'S INTEREST. 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. SEC. 723. BASIS OF PROPERTY CONTRIBUTED TO PARTNERSHIP. 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. Subpart B—Distributions by a Partnership Sec. Sec. Sec. Sec.

731. 732. 733. 734.

Extent of recognition of gain or loss on distribution. Basis of distributed property other than money. Basis of distributee partner's interest. Optional adjustment to basis of undistributed partnership property. Sec. 735. Character of gain or loss on disposition of distributed property. Sec. 736. Payments to a retiring partner or a deceased partner's successor in interest. SEC. 731. EXTENT OF RECOGNITION OF GAIN OR LOSS ON DISTRIBUTION.

(a) PARTNERS.—In the case of a distribution by a partnership to a partner— (1) gain shall not be recognized to such partner, except to the extent that any money distributed exceeds the adjusted basis of such partner's interest in the partnership immediately before the distribution, and (2) loss shall not be recognized to such partner, except that upon a distribution in liquidation of a partner's interest in a partnership where no property other than that described in subparagraph (A) or (B) is distributed to such partner, loss shall be recognized to the extent of the excess of the adjusted basis of such partner's interest in the partnership over the sum of— (A) any money distributed, and (B) the basis to the distributee, as determined under section 732, of any unrealized receivables (as defined in section 751(c)) and inventory (as defined in section 751(d)(2)). § 731(a)(2)(B)

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