Contribution of property towards the partners as an exchange for the partnership interest

The general rule under Section 721(b) on partnerships indicate that a no gain or loss will be recognised to a partnership or for any of the partners in the case of the contribution of property towards the partners as an exchange for the partnership interest (Cornell Law School, 2017). The only basis for the interest in a partnership only includes the contribution of property including money to the partnership at the time of contribution to the partnership. And no gain or loss associated with the partnership that may arise will be considered or presented in exchange for a particular interest in the partnership.

References

Cornell Law School. (2017, August 10). 26 U.S. Code § 721 – Nonrecognition of gain or loss on contribution. Retrieved August 10, 2017, from https://www.law.cornell.edu/uscode/text/26/721

 

Leave a Reply

Your email address will not be published. Required fields are marked *


x

Related Posts

Perpetual Inventory System
A company using a perpetual inventory system keeps a continuous record of the physical quantities in its inventory. It records the purchase, or p...
Business Valuation Software
Businesses planning to close, merge or acquire another company need to undergo the process of business valuation. An accurate and up-to-date valu...
Hedge Funds - Meaning
Hedge funds are private investment organisations in Europe and USA. These are generally structured are limited liability partnership with the gen...
powered by RelatedPosts