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File Form 15254 to request a section 754 revocation. Current revision. Form 15254 and instructions PDF. Recent developments. None at this time. Other items you may find useful. Tax information for partnerships. Questions and answers about section 754 election and revocation. Other current products

Tax Year End Section 754 Election Was Made The year the section 754 election was made is the last day of the tax year for which the election was attached to the return for that year. Example. A calendar year taxpayer attached the section 754 election to its Form 1065 filed for the tax year ending December 31, 2013. The year the section 754 ...

Under IRC Section 743(b), a Section 754 election allows adjustments to the inside basis when a partnership interest is transferred. For example, if a partner buys into a partnership for $500,000, but the partnership’s inside basis is $300,000, the election allows an adjustment to $500,000. ... Revocation requires IRS approval, which is not ...

Revocation or Termination Procedures. Although a 754 election can provide tax benefits, partnerships must understand the procedures for revoking or terminating the election. Once made, the election is generally binding for all subsequent tax years unless the IRS grants consent for revocation.

Editor: Greg A. Fairbanks, J.D., LL.M. In September 2020, the IRS released a draft of a new form, Form 15254, Request for Section 754 Revocation, that a partnership would use to request a revocation of a Sec. 754 election.The IRS explained that the form has been developed due to an increase in Sec. 754 election revocation applications since the technical termination of a partnership under ...

When there is a Section 754 election, these disparities are corrected by adjusting the partnership’s inside basis under IRC § 734(b). Note, however, that a reduction to the inside basis of partnership assets (i.e., a negative Section 734(b) adjustment) occurs only from a liquidating distribution. The Section 734(b) adjustment is determined by:

An IRC Section 754 election allows a partnership to adjust the basis of the property within a partnership under IRC Sections 734(b) and 743(b) when one of two triggering events occur: 1) a ...

The partnership may elect under section 754 and this section to adjust the basis of partnership property under sections 734(b) and 743(b). Unless an extension of time to make the election is obtained under the provisions of § 1.9100-1 , the election must be made in a written statement filed with the partnership return for 1971 and must contain ...

Revoking a Sec. 754 election. A partnership that wants to revoke its Sec. 754 election should file its revocation request using newly released Form 15254, Request for Section 754 Revocation, which must be filed no later than 30 days after the close of the partnership’s tax year and must state the reason(s) for requesting a revocation. The ...

The IRS Large Business and International (LB&I) division, in collaboration with the IRS Small Business and Self-Employed (SBSE) division, developed a new form (Form 15254) with instructions for the partnership to use to submit the revocation request. Form 15254—Request for Section 754 Revocation, the data is the same collected on the Form

Within seven (7) days of co-assignment, the SFTS and the cadre attorney will start the review of the IRC section 754 revocation request. If the partnership is under examination (see BMFOLI, BMFOLT, and/or AMDISA), the SFTS will collaborate with the examination team manager to determine whether the revocation request determination would impact ...

To handle the demand, the IRS released new Form 15254, Request for Section 754 Revocation. A partnership must prepare and submit Form 15254 to the applicable IRS district director with reasonable cause for revocation. The instructions specifically state that "no application for revocation of a section 754 election shall be approved when the ...

By John G. Hodnette and Savannah Rankich A partnership may elect to adjust its inside basis under Sections 734(b) and 743(b) by making a Section 754 election with the partnership’s annual tax return. The basis adjustment occurs, however, only when there is (1) a distribution of partnership property or (2) a transfer of partnership interest. 754 elections

Regs. Sec. 1.754-1(c) provides for the revocation of a Sec. 754 election under certain circumstances. A request for revoking the election must be filed with the District Director for the district in which the partnership files its return. The request must be filed no later than 30 days after the close of the partnership tax year for which the ...

(The IRC section 754 election triggers the application of IRC section 743, which provides the incoming partner with an optional basis adjustment—here, the $120,000 difference between S’s inside and outside basis. ... The application for revocation must be filed no later than 30 days after the close of the partnership tax year for which the ...

The final regulations removed the signature requirement. Thus, under Treas. Reg. Section 1.754-1(b), the requirements for making an IRC Section 754 election are (1) a written statement, (2) filed with the partnership return for the tax year during which the distribution or transfer occurs, (3) within the correct filing period (with extensions).

To streamline applications for revocation of Section 754 elections, the IRS has developed procedures and issued a new Form (Form 15254). The Form requires a statement of reasonable cause for revocation of the election. This course will discuss the benefits and detriments of a Section 754 Election and the reasons why a Partnership may want to ...

Implemented correctly, Section 754 elections can offer opportunities to amplify depreciation or amortization fo . ... although rare circumstances may allow revocation with IRS approval. Benefits of a Section 754 Election. In scenarios where a partnership's properties are depreciable or amortizable, the elevated basis facilitates the partner to ...

§ 754 of the Internal Revenue Code. LP desired to revoke its § 754 election. ... Section 1.754-1(c)(2) provides that notwithstanding § 1.754-1(c)(1), any partnership having an election in effect under § 754 for its taxable year that includes ... For the revocation to be valid, the statement must be filed not. 2