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:

Unamortized Premium

The portion of a bond premium that has not yet been amortized over the life of the bond.

Bond Financing

A method where companies or governments issue bonds to investors to raise capital for their projects or operational needs.

Equity Financing

Raising capital through the sale of shares in the company, thereby generating funds without incurring debt.

Cash Flows

Cash flows refer to the inflows and outflows of cash and cash equivalents, indicating a company's financial health.