Question
What does §721 generally accomplish when property is contributed to a partnership?
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Answer
No gain or loss is recognized on the contribution.
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Question
When is a nonliquidating partnership distribution tax-free?
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Answer
Generally, unless cash exceeds outside basis.
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Question
Why are guaranteed payments deducted before computing ordinary business income?
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Answer
They reduce the partnership's ordinary business income.
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Question
Why can gain on the sale of a partnership interest be partly ordinary income?
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Answer
§751 hot assets prevent conversion of ordinary income to capital gain.
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