It is easier to satisfy the § 721 requirements for the nonrecognition of gain or loss on partner contributions than it is to satisfy the § 351 requirements for the nonrecognition of gain or loss on shareholder contributions.

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The requirements for § 721 are generally less strict than those for § 351. For example, § 721 generally does not require continuity of interest or active involvement in the partnership, whereas these requirements may apply under § 351. Therefore, it is easier to satisfy the requirements for nonrecognition of gain or loss on partner contributions under § 721 than it is for shareholder contributions under § 351.

It Is Easier to Satisfy the § 721 Requirements for the Nonrecognition