The transfer of property to a partnership in exchange for a partnership interest will generally be a nontaxable event.

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This is known as a contribution of property to a partnership and it is generally a nontaxable event under Section 721 of the Internal Revenue Code. The contributing partner's tax basis in their partnership interest is equal to the tax basis of the property contributed, and any potential gain or loss on the contributed property is deferred until the partnership sells or disposes of the property.

The Transfer of Property to a Partnership in Exchange for a Partnership