Tax Accounting

Contribution of the 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 the 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 ยง 721 – Nonrecognition of gain or loss on contribution. Retrieved August 10, 2017, from https://www.law.cornell.edu/uscode/text/26/721

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