To the extent of built-in gain or built-in loss at the time of contribution, partnerships may choose to allocate or not allocate this built-in gain or loss to the contributing partner on the sale of the contributed property by the partnership.

Question

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Partnerships are required to allocate built-in gain or loss to the contributing partner when the contributed property is sold, according to the Internal Revenue Code Section 704(c).

To the Extent of Built-In Gain or Built-In Loss at the Time