Question
Why is a partner’s contribution of property generally tax-free under §721?
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Answer
No gain or loss is recognized on contribution.
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Question
When can a partner recognize loss on a liquidating distribution?
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Answer
Only if distribution is solely cash, receivables, and inventory.
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Question
Why is gain from a partnership interest sale not always capital?
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Answer
§751 hot assets create ordinary income.
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Question
What does amount realized include when a partner sells a partnership interest?
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Answer
Cash received plus relief of partnership liabilities.
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