Gains on sales or exchanges between a partner and the partnership are treated as ordinary income if the partner owns more than a 50% interest in the capital or profits and the asset that is exchanged is not a capital asset in the transferee's hands.

Question

Quizplus · Accepted Answer

Gains on sales or exchanges between a partner and the partnership are indeed treated as ordinary income if the partner owns more than a 50% interest in the capital or profits and the asset that is exchanged is not a capital asset in the transferee's hands.

Gains on Sales or Exchanges Between a Partner and the Partnership