26 U.S.C. § 721: Nonrecognition of gain or loss on contribution

No gain or loss shall be recognized to a partnership or to any of its partners in the case of a contribution of property to the partnership in exchange for an interest in the partnership. Subsection (a) shall not apply to gain realized on a transfer of property to a partnership which would be treated as an investment company (within the meaning of section 351) if the partnership were incorporated. The Secretary may provide by regulations that subsection (a) shall not apply to gain realized on the transfer of property to a partnership if such gain, when recognized, will be includible in the gross income of a person other than a United States person. For regulatory authority to treat intangibles transferred to a partnership as sold, see section 367(d)(3). Except as provided in paragraph (4), the amendments made by subsections (b) and (c) [amending this section and sections 722 and 723 of this title] shall apply to transfers made after February 17, 1976 , in taxable years ending after such date. a ruling request with respect to such transfers was filed with the Internal Revenue Service before March 27, 1976 , or a registration statement with respect to such transfers was filed with the Securities and Exchange Commission before March 27, 1976 , the securities transferred were deposited on or before the 60th day after the date of the enactment of this Act [ Oct. 4, 1976 ], and the aggregate value (determined as of the close of the 60th day referred to in subparagraph (B), or, if earlier, the close of the deposit period) of the securities so transferred does not exceed $100,000,000, or the securities transferred were all on deposit on February 29, 1976 , pursuant to a registration statement referred to in subparagraph (A)(ii). as if paragraph (4) did not contain subparagraph (A)(ii) thereof, and by substituting ‘$25,000,000’ for ‘$100,000,000’ in subparagraph (C)(i) thereof.”