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Title 26 — Internal Revenue CodeRelease 119-73

§752 Treatment of certain liabilities

Title 26 › Subtitle Subtitle A— - Income Taxes › Chapter CHAPTER 1— - NORMAL TAXES AND SURTAXES › Subchapter Subchapter K— - Partners and Partnerships › Part PART II— - CONTRIBUTIONS, DISTRIBUTIONS, AND TRANSFERS › Subpart Subpart D— - Provisions Common to Other Subparts › § 752

Last updated Apr 6, 2026|Official source

Summary

An increase in a partner’s debt share, or the partner assuming it, counts as partner contributing; a decrease, or the partnership assuming the partner’s debt, counts as partner receiving. Debt on property counts as the owner’s up to fair market value; liabilities for a partnership sale are treated like other property sales.

Full Legal Text

Title 26, §752

Internal Revenue Code — Source: USLM XML via OLRC

(a)Any increase in a partner’s share of the liabilities of a partnership, or any increase in a partner’s individual liabilities by reason of the assumption by such partner of partnership liabilities, shall be considered as a contribution of money by such partner to the partnership.
(b)Any decrease in a partner’s share of the liabilities of a partnership, or any decrease in a partner’s individual liabilities by reason of the assumption by the partnership of such individual liabilities, shall be considered as a distribution of money to the partner by the partnership.
(c)For purposes of this section, a liability to which property is subject shall, to the extent of the fair market value of such property, be considered as a liability of the owner of the property.
(d)In the case of a sale or exchange of an interest in a partnership, liabilities shall be treated in the same manner as liabilities in connection with the sale or exchange of property not associated with partnerships.

Legislative History

Notes & Related Subsidiaries

Statutory Notes and Related Subsidiaries

Overruling of Raphan Case Pub. L. 98–369, div. A, title I, § 79, July 18, 1984, 98 Stat. 597, as amended by Pub. L. 99–514, § 2, Oct. 22, 1986, 100 Stat. 2095, provided that: “(a) General Rule.—section 752 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (and the

Regulations

prescribed thereunder) shall be applied without regard to the result reached in the case of Raphan vs the United States, 3 Cl. Ct. 457 (1983). “(b)

Regulations

.—In amending the

Regulations

prescribed under section 752 of such Code to reflect subsection (a), the Secretary of the Treasury or his delegate shall prescribe

Regulations

relating to liabilities, including the treatment of guarantees, assumptions, indemnity agreements, and similar arrangements.”

Reference

Citations & Metadata

Citation

26 U.S.C. § 752

Title 26 — Internal Revenue Code

Last Updated

Apr 6, 2026

Release point: 119-73