### Question
How does DETERMINATION OF TAX LIABILITY define built-in loss?


### Answer
Under *26 U.S.C. § 704*, **built-in loss** is defined as:

> the excess of the adjusted basis of the property (determined without regard to subparagraph (C)(ii)) over its fair market value at the time of contribution

#### Citation:
  - *26 U.S.C. § 704*
  - Heading: **Subtitle A-Income Taxes > CHAPTER 1-NORMAL TAXES AND SURTAXES > Subchapter K-Partners and Partnerships > PART I-DETERMINATION OF TAX LIABILITY**

