The contribution of depreciated property in a tax-free exchange for a partnership interest does not trigger the § 1245 or § 1250 depreciation recapture provisions.

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When a tax-free exchange is made for a partnership interest, the contribution of depreciated property does not trigger the § 1245 or § 1250 depreciation recapture provisions. This is because the depreciation recapture rules only apply when property is sold or otherwise disposed of, not when it is exchanged for another property or interest.

The Contribution of Depreciated Property in a Tax-Free Exchange for a Partnership