---
kind: "section"
citation: "26 U.S.C. § 752"
title: "26"
title_heading: "Internal Revenue Code"
number: "752"
heading: "Treatment of certain liabilities"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/26/752"
units:
  - "Subtitle A — Income Taxes"
  - "Chapter 1 — Normal Taxes and Surtaxes"
  - "Subchapter K — Partners and Partnerships"
  - "Part II — Contributions, Distributions, and Transfers"
  - "Subpart D — Provisions Common to Other Subparts"
---

# §752. Treatment of certain liabilities

- (a) **Increase in partner’s liabilities—** Any increase in a [partner](/usc/26/761.md?p=b)’s share of the liabilities of a [partnership](/usc/26/761.md?p=a), or any increase in a [partner](/usc/26/761.md?p=b)’s individual liabilities by reason of the assumption by such [partner](/usc/26/761.md?p=b) of [partnership](/usc/26/761.md?p=a) liabilities, shall be considered as a contribution of money by such [partner](/usc/26/761.md?p=b) to the [partnership](/usc/26/761.md?p=a).
- (b) **Decrease in partner’s liabilities—** Any decrease in a [partner](/usc/26/761.md?p=b)’s share of the liabilities of a [partnership](/usc/26/761.md?p=a), or any decrease in a [partner](/usc/26/761.md?p=b)’s individual liabilities by reason of the assumption by the [partnership](/usc/26/761.md?p=a) of such individual liabilities, shall be considered as a distribution of money to the [partner](/usc/26/761.md?p=b) by the [partnership](/usc/26/761.md?p=a).
- (c) **Liability to which property is subject—** For purposes of this section, a liability to which [property](/usc/26/317.md?p=a) is subject shall, to the extent of the fair market [value](/usc/26/851.md?p=c-4) of such [property](/usc/26/317.md?p=a), be considered as a liability of the owner of the [property](/usc/26/317.md?p=a).
- (d) **Sale or exchange of an interest—** In the case of a [sale or exchange](/usc/26/864.md?p=c-8-D) of an [interest](/usc/26/856.md?p=f-1) in a [partnership](/usc/26/761.md?p=a), liabilities shall be treated in the same manner as liabilities in connection with the [sale or exchange](/usc/26/864.md?p=c-8-D) of [property](/usc/26/317.md?p=a) not associated with [partnerships](/usc/26/761.md?p=a).

## Source credit

(Aug. 16, 1954, ch. 736, 68A Stat. 251.)

## Notes

### 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: 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). 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.”