§ 735. Character of gain or loss on disposition of distributed property
538 words·~2 min read·
/usc/title-26/section-735A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
(a)Sale or exchange of certain distributed property
(1)Unrealized receivables Gain or loss on the disposition by a distributee partner of unrealized receivables (as defined in section 751(c)) distributed by a partnership, shall be considered as ordinary income or as ordinary loss, as the case may be.
(2)Inventory items Gain or loss on the sale or exchange by a distributee partner of inventory items (as defined in section 751(d)) distributed by a partnership shall, if sold or exchanged within 5 years from the date of the distribution, be considered as ordinary income or as ordinary loss, as the case may be.
(b)Holding period for distributed property In determining the period for which a partner has held property received in a distribution from a partnership (other than for purposes of subsection (a)(2)), there shall be included the holding period of the partnership, as determined under section 1223, with respect to such property.
(c)Special rules
(1)Waiver of holding periods contained in section 1231 For purposes of this section, section 751(d) (defining inventory item) shall be applied without regard to any holding period in section 1231(b).
(2)Substituted basis property
(A)In general If any property described in subsection
(a)is disposed of in a nonrecognition transaction, the tax treatment which applies to such property under such subsection shall also apply to any substituted basis property resulting from such transaction. A similar rule shall also apply in the case of a series of nonrecognition transactions.
(B)Exception for stock in C corporation Subparagraph
(A)shall not apply to any stock in a C corporation received in an exchange described in section 351.
(Aug. 16, 1954, ch. 763, 68A Stat. 247; Pub. L. 94–455, title XIX, § 1901(b)(3)(D), Oct. 4, 1976, 90 Stat. 1792; Pub. L. 98–369, div. A, title I, § 74(b), July 18, 1984, 98 Stat. 593; Pub. L. 105–34, title X, § 1062(b)(3), Aug. 5, 1997, 111 Stat. 947.)
Connections3 cite this · traces to 2
Cited by 3 sections · top 2
15 references not yet in our index
- Aug. 16, 1954, ch. 763
- 68A Stat. 247
- Pub. L. 94–455, title XIX, § 1901(b)(3)(D)
- 90 Stat. 1792
- Pub. L. 98–369, div. A, title I, § 74(b)
- 98 Stat. 593
- Pub. L. 105–34, title X, § 1062(b)(3)
- 111 Stat. 947
- Pub. L. 105–34
- Pub. L. 98–369
- Pub. L. 94–455
- section 1062(c) of Pub. L. 105–34
- Pub. L. 98–369, div. A, title I, § 74(d)(2)
- 98 Stat. 594
- section 1901(d) of Pub. L. 94–455
Citation graph
cites case law
§ 735
Character of gain or loss on disposition of distributed property
Stat.×3
ActAug. 16, 1954, ch. 763
Stat.68A Stat. 247
Pub. L.Pub. L. 94–455, title XIX, § 1901(b)(3)(D)
Stat.90 Stat. 1792
Pub. L.Pub. L. 98–369, div. A, title I, § 74(b)
Cites 17 · showing 7Cited by 3 across 1 source