Many changes in the form of doing business, such as the receipt of an interest on formation of a partnership in exchange for property, are allowed to occur without gain recognition.

Question

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Changes in the form of doing business that involve the receipt of an interest in exchange for property are generally allowed to occur without triggering recognition of gain. This is due to the fact that these transactions are typically considered to be nontaxable exchanges under the tax code.

Many Changes in the Form of Doing Business, Such as the Receipt