Section 721 Provides That No Gain or Loss Is Recognized

question 71

True/False

Section 721 provides that no gain or loss is recognized on a contribution of property to a partnership in exchange for an interest in the partnership. An exception might apply if the taxpayer receives a cash distribution from the partnership soon after the property contribution is made.

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Definitions:

Export Broker

A person or company that acts as an intermediary, arranging for goods to be sold and shipped to overseas buyers.

Prohibited Components

Items or substances that are not allowed to be used in the manufacture or assembly of a product due to legal, safety, or health reasons.

Ratify

To confirm by expressing consent, approval, or formal sanction.

Contract

A legally binding agreement between two or more parties outlining specific obligations and rights, which, if broken, can result in legal consequences.