Colorado State University Selling Appreciated Property to Partnership Paper

If Joan, an individual, sells appreciated property to a partnership, she would likely recognize a taxable gain on this transaction under U.S. Federal tax law. However, if the same property was contributed to the partnership, under IRC Reg. Sec. 1.721-2(f), no gain would be recognized by Joan. Consider why the tax law provides this, seemingly, disparate treatment.

Describe a reason why you think this outcome makes sense.

 
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