I.R.C. § 721(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.
I.R.C. § 721(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.
I.R.C. § 721(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.
I.R.C. § 721(d) Transfers Of Intangibles
For regulatory authority to treat intangibles transferred to a partnership as sold,
see section 367(d)(3).
(Aug. 16, 1954, ch. 736, 68A Stat. 245; Oct. 4, 1976,
Pub. L. 94-455, title XXI, 2131(b), 90 Stat. 1924; Pub. L. 105-34, title XI, Sec. 1131(b), Aug. 5, 1997, 111 Stat 788.)
1984--Pub. L. 98-369, div. A, title I, 74(c), July 18, 1984, 98 Stat. 593, added item 724.
1997--Subsec. (c). Pub. L. 105-34, Sec. 1131(b)(3), added new subsection (c).
Subsec. (d). Pub. L. 105-34, Sec. 1131(b)(5)(B), added new subsection (d).
1976--Pub. L. 94-455 designated existing provisions as subsec. (a), added subsec. (a) heading “General
rule”, and added subsec. (b).
EFFECTIVE DATE OF 1976 AMENDMENT
Section 2131(f)(3)-(5) of Pub. L. 94-455 provided that:
“(3) Except as provided in paragraph (4), the amendments made by subsections (b) and
(c) [amending sections 721, 722, and 723 of this title] shall apply to transfers made
after February 17, 1976, in taxable years ending after such date.
“(4) The amendments made by subsections (b) and
(c) [amending sections 721, 722, and 723 of this title] shall not apply to transfers
to a partnership made on or before the 90th day after the date of the enactment of
this Act [Oct. 4, 1976] if--
“(i) a ruling request with respect to such transfers was filed with the Internal Revenue
Service before March 27, 1976, or
“(ii) a registration statement with respect to such transfers was filed with the Securities
and Exchange Commission before March 27, 1976,
“(B) the securities transferred were deposited on or before the 60th day after the
date of the enactment of this Act [Oct. 4, 1976], and
“(i) the aggregate value (determined as of the close of the 60th day referred to in
subparagraph (B), or, if earlier, the close of the deposit period) of the securities
so transferred does not exceed $100,000,000, or
“(ii) the securities transferred were all on deposit on February 29, 1976, pursuant
to a registration statement referred to in subparagraph (A)(ii).
“(5) If no registration statement was required to be filed with the Securities and
Exchange Commission with respect to the transfer of securities to any partnership,
then paragraph (4)
shall be applied to such transfers--
“(A) as if paragraph (4) did not contain subparagraph (A)(ii) thereof, and
“(B) by substituting ‘$25,000,000’
for ‘$100,000,000’ in subparagraph (C)(i) thereof.”
Section 1131(d) of Pub. L. 105-34 provided that:
The amendments made by this section shall take effect on the date of the enactment
of this Act [enacted: Aug. 5, 1997].