Code section · 1954
IRC §743 and §754
26 U.S.C. §§743, 754
Internal Revenue Code
What it holds
With a §754 election in effect, a buyer of a partnership interest gets a §743(b) adjustment to the partnership's asset basis. A positive adjustment can take bonus under Treas. Reg. 1.168(k)-2(b)(3)(iv)(D) when the buyer had no prior interest, the seller was unrelated, and the basis is not carryover or §1014 basis. The elect-out is by class within the adjustment (1.168(k)-2(f)(1)(ii)(G)).
Why it matters for your study: Let a buyer of a partnership or LLC interest step up its share of the partnership's property basis when a §754 election is in effect. A study can split that step-up into short-life property, so it can take bonus depreciation.
- Category
- Methodology & procedure
- Applies to
- All property types
- Status
- Vetted
This page explains a tax authority in plain words. It is not tax advice for your situation. Joel Salas, our Director of Tax, signs every study. Citation is provided so you or your advisor can read the primary source.