---
type: "LegalText"
title: "26 U.S.C. § 741"
description: "Recognition and character of gain or loss on sale or exchange"
jurisdiction: "us"
corpus: "united_states_code"
kind: "code_section"
title_number: 26
title_name: "INTERNAL REVENUE CODE"
chapter_number: "1"
chapter_name: "NORMAL TAXES AND SURTAXES"
section: "741"
citation: "26 U.S.C. § 741"
status: "current"
release_point: "119-100"
release_date: "2026-06-26"
source: "official"
source_url: "https://uscode.house.gov/download/releasepoints/us/pl/119/100/xml_usc26@119-100.zip"
source_identifier: "/us/usc/t26/s741"
source_file: "data/legal/raw/us/code/title-26/usc26.xml"
source_hash: "d574848c79707e2b04c8937de0f0fce0e71755ad116319a4b0ae29b3f2b95474"
raw_snapshot_hash: "a261f094809116f42a96648a3d5eee80fa010379d67412551c21dd5c900b27f4"
text_hash: "be51461446579270b438d3da8b85d91d5029dd302521a4a08ee42757921a46a9"
retrieved_at: "2026-07-04"
confidence: "official"
tags: ["legal", "us-code"]
---

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

## Text

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.)

## Notes

Editorial Notes

Amendments2002—Pub. L. 107–147 struck out “which have appreciated substantially in value” after “inventory items”.