mavii

A Section 754 election applies to all property distributions and transfers of partnership interests during the partnership tax year for which the election is made, plus for all later tax years, unless revoked. Under the Section 754 regulations, however, an application to revoke the election will not be approved if the revocation’s primary ...

The logistics of making the basis adjustment involve filing a written statement with the tax return. There is no specific “754 election form.” The statement is a declaration that the partnership elects to apply the provisions of IRC § 734(b) or 743(b) and must be signed by a partner authorized to sign the tax return.

To make a Section 754 election, the partnership must attach a statement to its timely filed tax return, including extensions, for the year of the triggering event. This statement must clearly declare the election under Section 754 and be signed by an authorized partner.

Section 754 and 743(b) depreciation is usually used to reduce the income reported on the K-1 from the partnership side. A section 754 depreciation adjustment reported on the supplemental information page of a K-1 doesn't usually need to be reported anywhere on the individual tax return.

Properly reporting Section 754 depreciation on a K-1 form is essential for compliance and optimizing tax positions. When Section 754 Depreciation Applies. Section 754 depreciation becomes relevant when there is a transfer of a partnership interest, whether through sale, inheritance, or a property distribution by the partnership.

To file, the partnership must attach a written statement to its timely filed tax return, including extensions, for the tax year in which the triggering event occurs. This statement, submitted with Form 1065 (U.S. Return of Partnership Income), should explicitly declare the partnership’s intent to make the election under Section 754.

Failure to properly execute tax elections is a major area of litigation for practitioners. Because a Section 754 election requires a partner’s signature, the advent of tax return e-filing technology has complicated the process and presented procedural challenges in properly executing such elections.

To make the election, a partnership must attach a statement to the partnership’s tax return for the tax year during which a distribution or transfer occurs. The statement must include (1) the name and address of the partnership, and (2) a declaration that the partnership elects under IRC Section 754 to apply the provisions of IRC Sections 734 ...

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

The Code Section 754 Election. A partnership makes the Code Section 754 election by including a statement with its tax return. The statement must be filed by the due date (with extensions) of the partnership return, and it must include: The name and address of the partnership; A declaration that the partnership elects under Section 754 to apply ...

The partnership makes the Section 754 election by attaching the appropriate information to its income tax return. Once the election is made, it applies to all future transfers unless the election ...

The §754 Election MSI Global Federal Tax SIG Presentation August 20, 2020 Presented by John F. McDermott, JD, LLM, CPA and ... Additional information to include with the partnership tax return 2. Notice requirements of partners. II. What is the §754 Election? ... §754 is in effect, the excess of $1,000 (the partnership basis before the ...

Information Needed for a 754 Election. To file a Section 754 election, certain details are required: Partnership’s Name, Address, and EIN: This information is found on Form 1065. The Statement of Election: The partnership must attach a statement to its tax return specifically stating that it is electing under IRC Section 754.

Election Procedure: To make a Section 754 election, a partnership must file a written statement with its tax return for the year in which the triggering event occurs. This election is irrevocable without the consent of the IRS. ... From a tax perspective, the Section 754 election can be quite beneficial. It allows for a step-up or step-down in ...

For the election to be valid, the return must be filed no later than the time prescribed for filing the return (including extensions) for the tax year. Further, a valid Sec. 754 election must (1) set forth the name and address of the partnership making the election, (2) be signed by any one of the partners, and (3) contain a declaration that ...

The Section 754 election must be made in a statement that is filed with the partnership's timely filed return (including any extension) for the tax year during which the distribution or transfer occurs. The statement must include: the name and address of the partnership;

To make a Section 754 election, a partnership must notify the IRS by attaching a written statement to its timely filed tax return for the year in which the election is to take effect. This statement must indicate that the partnership is electing under Section 754 to adjust the basis of its property under Sections 734(b) and 743(b).

Timing: The Section 754 election must be made by the partnership on its tax return for the year in which the event triggering the basis adjustment occurs. It's crucial to timely elect and properly document the election. Valuation: Accurate valuation of partnership assets is essential to correctly determine the basis adjustments.

If you complete a paper tax return, you may need to use supplementary page SA102 to record employment income on your SA100 tax return. Updates to this page Published 30 April 2025