26 U.S.C. § 741

Recognition and character of gain or loss on sale or exchange

In the case of a sale or exchange of an interest in a partnership, gain or loss shall be recognized to the transferor partner. Such gain or loss shall be considered as gain or loss from the sale or exchange of a capital asset, except as otherwise provided in section 751 (relating to unrealized receivables and inventory items).

( Aug. 16, 1954, ch. 736 , 68A Stat. 248 ; Pub. L. 107–147, title IV, § 417(12) , Mar. 9, 2002 , 116 Stat. 56 .)