26 USC § 741 - Recognition and character of gain or loss on sale or exchange

---
identifier: "/us/usc/t26/s741"
source: "usc"
legal_status: "official_prima_facie"
title: "26 USC § 741 - Recognition and character of gain or loss on sale or exchange"
title_number: 26
title_name: "INTERNAL REVENUE CODE"
section_number: "741"
section_name: "Recognition and character of gain or loss on sale or exchange"
chapter_number: 1
chapter_name: "NORMAL TAXES AND SURTAXES"
subchapter_number: "K"
subchapter_name: "Partners and Partnerships"
part_number: "II"
part_name: "CONTRIBUTIONS, DISTRIBUTIONS, AND TRANSFERS"
positive_law: false
currency: "119-84"
last_updated: "2026-04-17"
format_version: "1.1.0"
generator: "[email protected]"
source_credit: "(Aug. 16, 1954, ch. 736, 68A Stat. 248; Pub. L. 107–147, title IV, § 417(12), Mar. 9, 2002, 116 Stat. 56.)"
---


# § 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).

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

## Editorial Notes

### Amendments

2002— struck out “which have appreciated substantially in value” after “inventory items”.