# 26 U.S.C. § 741: Recognition and character of gain or loss on sale or exchange

Source: OLRC release point 119-134 <https://uscode.house.gov/us/usc/119-134/t26/s741>. Cite pinpoints as 26 U.S.C. § 741(a)(1).

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).

## Regulations

- [Treas. Reg. § 1.741-1](/26/reg/1.741-1.md): Recognition and character of gain or loss on sale or exchange. (interprets § 741)

## Final rules

- [65 FR 57092](https://www.federalregister.gov/documents/2000/09/21/00-24038/capital-gains-partnership-subchapter-s-and-trust-provisions) (2000): Capital Gains, Partnership, Subchapter S, and Trust Provisions

## Leading cases

- [Bernard D. Spector v. Commissioner, 641 F.2d 376 (5th Cir. 1981)](https://www.courtlistener.com/opinion/387243/bernard-d-spector-v-commissioner-of-internal-revenue/)
- [Foxman v. Commissioner, 41 T.C. 535 (1964)](https://www.courtlistener.com/opinion/4701608/foxman-v-commissioner/)
- [Harris v. Commissioner, 61 T.C. 770 (1974)](https://www.courtlistener.com/opinion/4703831/harris-v-commissioner/)

## Connections

Cites: § 751 Unrealized receivables and inventory items

Cited by: none

## Amendments

- 1954-08-16: [Act Aug. 16, 1954, ch. 736](/26/act/1954-ch736.md), 68A Stat. 248
- 2002-03-09: [Pub. L. 107-147](/26/act/107-147.md), 116 Stat. 56