Statute section

IRC section 721

Nonrecognition of gain or loss on contribution

Country

United States

Section

721

Updated

2026-05-20

Operative text

Section 721 generally provides nonrecognition treatment when a partner contributes property to a partnership in exchange for a partnership interest. There are important exceptions for transfers to investment partnerships and for the disguised-sale rules of Section 707(a)(2)(B).

Cross-references

26 U.S.C. 70726 U.S.C. 722

Primary sources

26 U.S.C. section 721Verified 2026-05-20

Important disclaimer

This library is for general tax education only. Always verify filing obligations, due dates, and tax consequences against the cited primary source or with a qualified tax professional.