§754 — Manner of electing optional adjustment to basis of partnership property

.In short, we are not convinced that any viable method for avoidance of the built-in LTCG tax exists for a hypothetical buyer of the estate's Wa-Klo stock .

Specifically, he cites section 754, which is captioned “Manner of electing optional adjustment to basis of partnership property.” Section 754 provides in pertinent part that, “[i]f a partnership files an election, .

relevant.7 Respondent does not argue that, ifDTDV validly made a section 754 election with its 2000 return, the section 743(b) adjustment allocated to Square Leg should have been less than $12,150,000.8 Instead, respondent challenges the validity ofthe election on the grounds that "Square Leg never held a bona fide partnership interest in DTDV." 3. Petitioner's Failure To Sign DTDV's Purported Section 754 Election Section 754 allows a partnership to elect, "in accordance with regulations prescri

Attached to both returns was the following statement, signed by Oriole23 − as general partner of OPLP: Otay Project LP hereby elects under Section 754 of the Internal Revenue Code to apply the provision of § 734 (b) and § 743 (b) in adjusting the basis of the partnership 23 The first statement attached to the March 2007 Form 1065 was signed by Al as general partner, and the second statement attached to the April 2007 Form 1065 was signed by Jim as VP of Oriole.

3 Surk made a section 754 election for 2016.

cipated future income that they wished to shelter. 7As explained § pp. 37-38, each partnership was terminated in late 2001 and replaced by a new partnership pursuant to section 708. For the sake of (continued...) - 14 - [*14] nership property under section 754. Delta was the managing partner for each roll fund, which executed with Delta a currency management and securities trading authorization agreement. This agreement authorized Delta to manage each roll fund's financial accounts and to trade

cipated future income that they wished to shelter. 7As explained § pp. 37-38, each partnership was terminated in late 2001 and replaced by a new partnership pursuant to section 708. For the sake of (continued...) - 14 - [*14] nership property under section 754. Delta was the managing partner for each roll fund, which executed with Delta a currency management and securities trading authorization agreement. This agreement authorized Delta to manage each roll fund's financial accounts and to trade

cipated future income that they wished to shelter. 7As explained § pp. 37-38, each partnership was terminated in late 2001 and replaced by a new partnership pursuant to section 708. For the sake of (continued...) - 14 - [*14] nership property under section 754. Delta was the managing partner for each roll fund, which executed with Delta a currency management and securities trading authorization agreement. This agreement authorized Delta to manage each roll fund's financial accounts and to trade

cipated future income that they wished to shelter. 7As explained § pp. 37-38, each partnership was terminated in late 2001 and replaced by a new partnership pursuant to section 708. For the sake of (continued...) - 14 - [*14] nership property under section 754. Delta was the managing partner for each roll fund, which executed with Delta a currency management and securities trading authorization agreement. This agreement authorized Delta to manage each roll fund's financial accounts and to trade

cipated future income that they wished to shelter. 7As explained § pp. 37-38, each partnership was terminated in late 2001 and replaced by a new partnership pursuant to section 708. For the sake of (continued...) - 14 - [*14] nership property under section 754. Delta was the managing partner for each roll fund, which executed with Delta a currency management and securities trading authorization agreement. This agreement authorized Delta to manage each roll fund's financial accounts and to trade

cipated future income that they wished to shelter. 7As explained § pp. 37-38, each partnership was terminated in late 2001 and replaced by a new partnership pursuant to section 708. For the sake of (continued...) - 14 - [*14] nership property under section 754. Delta was the managing partner for each roll fund, which executed with Delta a currency management and securities trading authorization agreement. This agreement authorized Delta to manage each roll fund's financial accounts and to trade

cipated future income that they wished to shelter. 7As explained § pp. 37-38, each partnership was terminated in late 2001 and replaced by a new partnership pursuant to section 708. For the sake of (continued...) - 14 - [*14] nership property under section 754. Delta was the managing partner for each roll fund, which executed with Delta a currency management and securities trading authorization agreement. This agreement authorized Delta to manage each roll fund's financial accounts and to trade

ollowing: Prior to actual termination ofthe Partnership, sell substantially all ofthe property in liquidation or cessation ofthe business; Confess ajudgment against the Partnership; File or consent to filing a petition for or against the Partnership under any federal or state bankruptcy, insolvency, or reorgamzation act; Exercise an election under Section 754 ofthe Code.

razilian retailer to the tax-sensitiveUnited States taxpayer/investor. Up until October22, 2004, such shifting was theoreticallypossible because the inside basis adjustment ofsection 743(b) was required only ifthe partnership filed an election under section 754. Section 704(c)(1)(C) now requires allocation ofbuilt-in losses to the partner contributing the built-in loss property, and only to that partner. A section 743(b) basis adjustment is now mandatory upon any transfer ofa partnership interes

razilian retailer to the tax-sensitiveUnited States taxpayer/investor. Up until October22, 2004, such shifting was theoreticallypossible because the inside basis adjustment ofsection 743(b) was required only ifthe partnership filed an election under section 754. Section 704(c)(1)(C) now requires allocation ofbuilt-in losses to the partner contributing the built-in loss property, and only to that partner. A section 743(b) basis adjustment is now mandatory upon any transfer ofa partnership interes

razilian retailer to the tax-sensitiveUnited States taxpayer/investor. Up until October22, 2004, such shifting was theoreticallypossible because the inside basis adjustment ofsection 743(b) was required only ifthe partnership filed an election under section 754. Section 704(c)(1)(C) now requires allocation ofbuilt-in losses to the partner contributing the built-in loss property, and only to that partner. A section 743(b) basis adjustment is now mandatory upon any transfer ofa partnership interes

- 10 - example, when a partnerpurchases an interest in a partnership, the partnership may elect under section 754 to make optional adjustments to the basis ofpartnership property.

- 10 - example, when a partnerpurchases an interest in a partnership, the partnership may elect under section 754 to make optional adjustments to the basis ofpartnership property.

razilian retailer to the tax-sensitiveUnited States taxpayer/investor. Up until October22, 2004, such shifting was theoreticallypossible because the inside basis adjustment ofsection 743(b) was required only ifthe partnership filed an election under section 754. Section 704(c)(1)(C) now requires allocation ofbuilt-in losses to the partner contributing the built-in loss property, and only to that partner. A section 743(b) basis adjustment is now mandatory upon any transfer ofa partnership interes

razilian retailer to the tax-sensitiveUnited States taxpayer/investor. Up until October22, 2004, such shifting was theoreticallypossible because the inside basis adjustment ofsection 743(b) was required only ifthe partnership filed an election under section 754. Section 704(c)(1)(C) now requires allocation ofbuilt-in losses to the partner contributing the built-in loss property, and only to that partner. A section 743(b) basis adjustment is now mandatory upon any transfer ofa partnership interes

razilian retailer to the tax-sensitiveUnited States taxpayer/investor. Up until October22, 2004, such shifting was theoreticallypossible because the inside basis adjustment ofsection 743(b) was required only ifthe partnership filed an election under section 754. Section 704(c)(1)(C) now requires allocation ofbuilt-in losses to the partner contributing the built-in loss property, and only to that partner. A section 743(b) basis adjustment is now mandatory upon any transfer ofa partnership interes

razilian retailer to the tax-sensitiveUnited States taxpayer/investor. Up until October22, 2004, such shifting was theoreticallypossible because the inside basis adjustment ofsection 743(b) was required only ifthe partnership filed an election under section 754. Section 704(c)(1)(C) now requires allocation ofbuilt-in losses to the partner contributing the built-in loss property, and only to that partner. A section 743(b) basis adjustment is now mandatory upon any transfer ofa partnership interes

- 10 - example, when a partnerpurchases an interest in a partnership, the partnership may elect under section 754 to make optional adjustments to the basis ofpartnership property.

razilian retailer to the tax-sensitiveUnited States taxpayer/investor. Up until October22, 2004, such shifting was theoreticallypossible because the inside basis adjustment ofsection 743(b) was required only ifthe partnership filed an election under section 754. Section 704(c)(1)(C) now requires allocation ofbuilt-in losses to the partner contributing the built-in loss property, and only to that partner. A section 743(b) basis adjustment is now mandatory upon any transfer ofa partnership interes

- 10 - example, when a partnerpurchases an interest in a partnership, the partnership may elect under section 754 to make optional adjustments to the basis ofpartnership property.

razilian retailer to the tax-sensitiveUnited States taxpayer/investor. Up until October22, 2004, such shifting was theoreticallypossible because the inside basis adjustment ofsection 743(b) was required only ifthe partnership filed an election under section 754. Section 704(c)(1)(C) now requires allocation ofbuilt-in losses to the partner contributing the built-in loss property, and only to that partner. A section 743(b) basis adjustment is now mandatory upon any transfer ofa partnership interes

razilian retailer to the tax-sensitiveUnited States taxpayer/investor. Up until October22, 2004, such shifting was theoreticallypossible because the inside basis adjustment ofsection 743(b) was required only ifthe partnership filed an election under section 754. Section 704(c)(1)(C) now requires allocation ofbuilt-in losses to the partner contributing the built-in loss property, and only to that partner. A section 743(b) basis adjustment is now mandatory upon any transfer ofa partnership interes

razilian retailer to the tax-sensitiveUnited States taxpayer/investor. Up until October22, 2004, such shifting was theoreticallypossible because the inside basis adjustment ofsection 743(b) was required only ifthe partnership filed an election under section 754. Section 704(c)(1)(C) now requires allocation ofbuilt-in losses to the partner contributing the built-in loss property, and only to that partner. A section 743(b) basis adjustment is now mandatory upon any transfer ofa partnership interes

razilian retailer to the tax-sensitiveUnited States taxpayer/investor. Up until October22, 2004, such shifting was theoreticallypossible because the inside basis adjustment ofsection 743(b) was required only ifthe partnership filed an election under section 754. Section 704(c)(1)(C) now requires allocation ofbuilt-in losses to the partner contributing the built-in loss property, and only to that partner. A section 743(b) basis adjustment is now mandatory upon any transfer ofa partnership interes

razilian retailer to the tax-sensitiveUnited States taxpayer/investor. Up until October22, 2004, such shifting was theoreticallypossible because the inside basis adjustment ofsection 743(b) was required only ifthe partnership filed an election under section 754. Section 704(c)(1)(C) now requires allocation ofbuilt-in losses to the partner contributing the built-in loss property, and only to that partner. A section 743(b) basis adjustment is now mandatory upon any transfer ofa partnership interes

razilian retailer to the tax-sensitiveUnited States taxpayer/investor. Up until October22, 2004, such shifting was theoreticallypossible because the inside basis adjustment ofsection 743(b) was required only ifthe partnership filed an election under section 754. Section 704(c)(1)(C) now requires allocation ofbuilt-in losses to the partner contributing the built-in loss property, and only to that partner. A section 743(b) basis adjustment is now mandatory upon any transfer ofa partnership interes

razilian retailer to the tax-sensitiveUnited States taxpayer/investor. Up until October22, 2004, such shifting was theoreticallypossible because the inside basis adjustment ofsection 743(b) was required only ifthe partnership filed an election under section 754. Section 704(c)(1)(C) now requires allocation ofbuilt-in losses to the partner contributing the built-in loss property, and only to that partner. A section 743(b) basis adjustment is now mandatory upon any transfer ofa partnership interes

razilian retailer to the tax-sensitiveUnited States taxpayer/investor. Up until October22, 2004, such shifting was theoreticallypossible because the inside basis adjustment ofsection 743(b) was required only ifthe partnership filed an election under section 754. Section 704(c)(1)(C) now requires allocation ofbuilt-in losses to the partner contributing the built-in loss property, and only to that partner. A section 743(b) basis adjustment is now mandatory upon any transfer ofa partnership interes

- 10 - example, when a partnerpurchases an interest in a partnership, the partnership may elect under section 754 to make optional adjustments to the basis ofpartnership property.

razilian retailer to the tax-sensitiveUnited States taxpayer/investor. Up until October22, 2004, such shifting was theoreticallypossible because the inside basis adjustment ofsection 743(b) was required only ifthe partnership filed an election under section 754. Section 704(c)(1)(C) now requires allocation ofbuilt-in losses to the partner contributing the built-in loss property, and only to that partner. A section 743(b) basis adjustment is now mandatory upon any transfer ofa partnership interes

razilian retailer to the tax-sensitiveUnited States taxpayer/investor. Up until October22, 2004, such shifting was theoreticallypossible because the inside basis adjustment ofsection 743(b) was required only ifthe partnership filed an election under section 754. Section 704(c)(1)(C) now requires allocation ofbuilt-in losses to the partner contributing the built-in loss property, and only to that partner. A section 743(b) basis adjustment is now mandatory upon any transfer ofa partnership interes

razilian retailer to the tax-sensitiveUnited States taxpayer/investor. Up until October22, 2004, such shifting was theoreticallypossible because the inside basis adjustment ofsection 743(b) was required only ifthe partnership filed an election under section 754. Section 704(c)(1)(C) now requires allocation ofbuilt-in losses to the partner contributing the built-in loss property, and only to that partner. A section 743(b) basis adjustment is now mandatory upon any transfer ofa partnership interes

razilian retailer to the tax-sensitiveUnited States taxpayer/investor. Up until October22, 2004, such shifting was theoreticallypossible because the inside basis adjustment ofsection 743(b) was required only ifthe partnership filed an election under section 754. Section 704(c)(1)(C) now requires allocation ofbuilt-in losses to the partner contributing the built-in loss property, and only to that partner. A section 743(b) basis adjustment is now mandatory upon any transfer ofa partnership interes

- 10 - example, when a partnerpurchases an interest in a partnership, the partnership may elect under section 754 to make optional adjustments to the basis ofpartnership property.

razilian retailer to the tax-sensitiveUnited States taxpayer/investor. Up until October22, 2004, such shifting was theoreticallypossible because the inside basis adjustment ofsection 743(b) was required only ifthe partnership filed an election under section 754. Section 704(c)(1)(C) now requires allocation ofbuilt-in losses to the partner contributing the built-in loss property, and only to that partner. A section 743(b) basis adjustment is now mandatory upon any transfer ofa partnership interes

- 10 - example, when a partnerpurchases an interest in a partnership, the partnership may elect under section 754 to make optional adjustments to the basis ofpartnership property.

razilian retailer to the tax-sensitiveUnited States taxpayer/investor. Up until October22, 2004, such shifting was theoreticallypossible because the inside basis adjustment ofsection 743(b) was required only ifthe partnership filed an election under section 754. Section 704(c)(1)(C) now requires allocation ofbuilt-in losses to the partner contributing the built-in loss property, and only to that partner. A section 743(b) basis adjustment is now mandatory upon any transfer ofa partnership interes

razilian retailer to the tax-sensitiveUnited States taxpayer/investor. Up until October22, 2004, such shifting was theoreticallypossible because the inside basis adjustment ofsection 743(b) was required only ifthe partnership filed an election under section 754. Section 704(c)(1)(C) now requires allocation ofbuilt-in losses to the partner contributing the built-in loss property, and only to that partner. A section 743(b) basis adjustment is now mandatory upon any transfer ofa partnership interes

razilian retailer to the tax-sensitiveUnited States taxpayer/investor. Up until October22, 2004, such shifting was theoreticallypossible because the inside basis adjustment ofsection 743(b) was required only ifthe partnership filed an election under section 754. Section 704(c)(1)(C) now requires allocation ofbuilt-in losses to the partner contributing the built-in loss property, and only to that partner. A section 743(b) basis adjustment is now mandatory upon any transfer ofa partnership interes

razilian retailer to the tax-sensitiveUnited States taxpayer/investor. Up until October22, 2004, such shifting was theoreticallypossible because the inside basis adjustment ofsection 743(b) was required only ifthe partnership filed an election under section 754. Section 704(c)(1)(C) now requires allocation ofbuilt-in losses to the partner contributing the built-in loss property, and only to that partner. A section 743(b) basis adjustment is now mandatory upon any transfer ofa partnership interes

razilian retailer to the tax-sensitiveUnited States taxpayer/investor. Up until October22, 2004, such shifting was theoreticallypossible because the inside basis adjustment ofsection 743(b) was required only ifthe partnership filed an election under section 754. Section 704(c)(1)(C) now requires allocation ofbuilt-in losses to the partner contributing the built-in loss property, and only to that partner. A section 743(b) basis adjustment is now mandatory upon any transfer ofa partnership interes

razilian retailer to the tax-sensitiveUnited States taxpayer/investor. Up until October22, 2004, such shifting was theoreticallypossible because the inside basis adjustment ofsection 743(b) was required only ifthe partnership filed an election under section 754. Section 704(c)(1)(C) now requires allocation ofbuilt-in losses to the partner contributing the built-in loss property, and only to that partner. A section 743(b) basis adjustment is now mandatory upon any transfer ofa partnership interes

razilian retailer to the tax-sensitiveUnited States taxpayer/investor. Up until October22, 2004, such shifting was theoreticallypossible because the inside basis adjustment ofsection 743(b) was required only ifthe partnership filed an election under section 754. Section 704(c)(1)(C) now requires allocation ofbuilt-in losses to the partner contributing the built-in loss property, and only to that partner. A section 743(b) basis adjustment is now mandatory upon any transfer ofa partnership interes

razilian retailer to the tax-sensitiveUnited States taxpayer/investor. Up until October22, 2004, such shifting was theoreticallypossible because the inside basis adjustment ofsection 743(b) was required only ifthe partnership filed an election under section 754. Section 704(c)(1)(C) now requires allocation ofbuilt-in losses to the partner contributing the built-in loss property, and only to that partner. A section 743(b) basis adjustment is now mandatory upon any transfer ofa partnership interes

razilian retailer to the tax-sensitiveUnited States taxpayer/investor. Up until October22, 2004, such shifting was theoreticallypossible because the inside basis adjustment ofsection 743(b) was required only ifthe partnership filed an election under section 754. Section 704(c)(1)(C) now requires allocation ofbuilt-in losses to the partner contributing the built-in loss property, and only to that partner. A section 743(b) basis adjustment is now mandatory upon any transfer ofa partnership interes

razilian retailer to the tax-sensitiveUnited States taxpayer/investor. Up until October22, 2004, such shifting was theoreticallypossible because the inside basis adjustment ofsection 743(b) was required only ifthe partnership filed an election under section 754. Section 704(c)(1)(C) now requires allocation ofbuilt-in losses to the partner contributing the built-in loss property, and only to that partner. A section 743(b) basis adjustment is now mandatory upon any transfer ofa partnership interes

- 10 - example, when a partnerpurchases an interest in a partnership, the partnership may elect under section 754 to make optional adjustments to the basis ofpartnership property.

razilian retailer to the tax-sensitiveUnited States taxpayer/investor. Up until October22, 2004, such shifting was theoreticallypossible because the inside basis adjustment ofsection 743(b) was required only ifthe partnership filed an election under section 754. Section 704(c)(1)(C) now requires allocation ofbuilt-in losses to the partner contributing the built-in loss property, and only to that partner. A section 743(b) basis adjustment is now mandatory upon any transfer ofa partnership interes

razilian retailer to the tax-sensitiveUnited States taxpayer/investor. Up until October22, 2004, such shifting was theoreticallypossible because the inside basis adjustment ofsection 743(b) was required only ifthe partnership filed an election under section 754. Section 704(c)(1)(C) now requires allocation ofbuilt-in losses to the partner contributing the built-in loss property, and only to that partner. A section 743(b) basis adjustment is now mandatory upon any transfer ofa partnership interes

razilian retailer to the tax-sensitiveUnited States taxpayer/investor. Up until October22, 2004, such shifting was theoreticallypossible because the inside basis adjustment ofsection 743(b) was required only ifthe partnership filed an election under section 754. Section 704(c)(1)(C) now requires allocation ofbuilt-in losses to the partner contributing the built-in loss property, and only to that partner. A section 743(b) basis adjustment is now mandatory upon any transfer ofa partnership interes

- 10 - example, when a partnerpurchases an interest in a partnership, the partnership may elect under section 754 to make optional adjustments to the basis ofpartnership property.

razilian retailer to the tax-sensitiveUnited States taxpayer/investor. Up until October22, 2004, such shifting was theoreticallypossible because the inside basis adjustment ofsection 743(b) was required only ifthe partnership filed an election under section 754. Section 704(c)(1)(C) now requires allocation ofbuilt-in losses to the partner contributing the built-in loss property, and only to that partner. A section 743(b) basis adjustment is now mandatory upon any transfer ofa partnership interes

razilian retailer to the tax-sensitiveUnited States taxpayer/investor. Up until October22, 2004, such shifting was theoreticallypossible because the inside basis adjustment ofsection 743(b) was required only ifthe partnership filed an election under section 754. Section 704(c)(1)(C) now requires allocation ofbuilt-in losses to the partner contributing the built-in loss property, and onlyto that partner. A section 743(b) basis adjustment is now mandatory upon any transfer ofa partnership interest

The partnership was involved in an apartment project that was managed by Republic Management, Inc., which also managed 14 other apartment projects insured by the Department of Housing and Urban Development.'As a result of a transfer of a partnership interest, Regency Plaza attached a section 754 election to its 1995 Form 1065, U.S.

ian retailer to the tax-sensitive United States taxpayer/investor. Up until October 22, 2004, such shifting was theoretically possible because the inside basis adjustment of section 743(b) was required only if the partnership filed an election under section 754. Section 704(c)(1)(C) now requires allocation of built-in losses to the partner contributing the built-in loss property, and only to that partner. A section 743(b) basis adjustment is now mandatory upon any transfer of a partnership inter

partner at the time ofcontribution, increased by the amount ofany gain recognized at contribütion) sec. 734 (providing fules for the adjustment of basis in partnership propertyto account for distributions ifthe partnership has made an election under sec. 754); sec. 743 (providing rules for the adjustment of basis in partnership propertyto account for transfers ofpartnership interest ifthe partnership has made an election under sec. 754). -10- contribution, the upper tierpartnership+wouldhold, a(

Gaughf, J&G contemplated increasing the basis in GaughfProperties through a "Section 754 step up in the partnership" in order to offset unrealized gains Mr.

ng the partner's basis for the partnership interest that are not themselves partnership items, such as the amount that the partner paid to acquire the partnership interest from a transferorpartner ifthat transfer was not covered by an election under section 754. Under the regulation, for purposes ofkeeping its books and records and providing information to the option partners as a purported partnership, Tigers Eye needed to determine the character ofthe amount distributed to an option partner; i

the partner’s basis for the partnership interest that are not themselves partnership items, such as the amount that the partner paid to acquire the partnership interest from a transferor partner if that transfer was not covered by an election under section 754. Under the regulation, for purposes of keeping its books and records and providing information to the option partners as a purported partnership, Tigers Eye needed to determine the character of the amount distributed to an option partner;

er at the time of contribution, increased by the amount of any gain recognized at contribution); sec. 734 (providing rules for the adjustment of basis in partnership property to account for distributions if the partnership has made an election under sec. 754); sec. 743 (providing rules for the adjustment of basis in partnership property to account for transfers of partnership interest if the partnership has made an election under sec. 754). JSRMC and RMC each filed a Form 2553, Election by a Sma

Gaughf, J&G contemplated increasing the basis in Gaughf Properties through a “Section 754 step up in the partnership” in order to offset unrealized gains Mr.

However, because Warwick had not made a section 754 election, the section 743(b) adjustment to~ the basis of partnership property did enot apply.

However, because Warwick had not made a section 754 election, the section 743(b) adjustment to~ the basis of partnership property did enot apply.

However, because Warwick had not made a section 754 election, the section 743(b) adjustment to~ the basis of partnership property did enot apply.

However, because Warwick had not made a section 754 election, the section 743(b) adjustment to~ the basis of partnership property did enot apply.

However, because Warwick had not made a section 754 election, the section 743(b) adjustment to~ the basis of partnership property did enot apply.

However, because Warwick had not made a section 754 election, the section 743(b) adjustment to~ the basis of partnership property did enot apply.

However, because Warwick had not made a section 754 election, the section 743(b) adjustment to~ the basis of partnership property did enot apply.

However, because Warwick had not made a section 754 election, the section 743(b) adjustment to~ the basis of partnership property did enot apply.

of the Barnes & .Noble Corner, and (v) the sacrifice of the Section 754 election for Charles Jones [upon his death] which would entirely eliminate 70 percent of the gain from the future sale of the Barnes & Noble Corner to a third party if Treaty Fields had retained ownership.

in complete liquidation of its interest in Wilmington, and Wilmington made a section 754 election as to the transaction .

(iii) the decrease in depreciation on the Barnes & Noble Corner, (iv) the 34% tax on * * * [petitioner] rather than the 15% tax rate Treaty Fields’ partners would have had on the future sale of the Barnes & Noble Corner, and (v) the sacrifice of the Section 754 election for Charles Jones [upon his death] which would entirely eliminate 70 percent of the gain from the future sale of the Barnes & Noble Corner to a third party if Treaty Fields had retained ownership.

See also Dial USA, Inc .

Regs., supra, provides that “A partner’s basis in his interest in the partnership is an affected item to the extent it is not a partnership item.” This definition indicates that outside basis can be a partnership item in certain circumstances, such as where a partnership makes an election under section 754 and must calculate a partner’s outside basis to determine its own basis in its assets under section 734(b), see sec.

BEP made an election under section 754 to adjust the basis of the partnership assets ( the inside .basis ) to equal BRLLC's basis on its newly acquired BEP partnership interest (th e outside basis) pursuant to section 743(b) .

To help balance out those discrepancies, section 754 allows a partnership to elect to adjust the inside basis of partnership assets to reflect the new 10(...continued) the obligation shouldn’t be treated as a liability for purposes of basis calculation.

To help balance out those discrepancies, section 754 allows a partnership to elect to adjust the inside basis of partnership assets to reflect the new partner’s different outside basis.

BEP made an election under section 754 to adjust the basis of the partnership assets (the inside basis) to equal BRLLC’s basis on its newly acquired BEP partnership interest (the outside basis) pursuant to section 743(b).

The LLC would not make an election under section 754 * * * to adjust the basis of its assets.

Can the Delaware Business Trust make an election under § 754 of the Code to increase basis in the underlying assets of the Delaware Business Trust?

ifying the IRS that it intended to file an amended return. For 1997, LKHP filed an additional Form 1065 as an amended return (1997 first amended return). The 1997 first amended return made an election to adjust the basis in the LKHP properties under section 754. The Schedule K and Schedules K-1 remained the same as in the original return. Also for 1997, LKHP filed an additional Form 1065 as an amended return (1997 second amended return). The 1997 second amended return was filed to correct the al

owth Fund, for which we utilize NAV data from January 5, 1996, contained in the record); (2) Dr. Bajaj’s sample of funds, with the addition of Liberty All Star Growth Fund; and 20(...continued) general partners of MIL were to agree to make a timely sec. 754 election with respect to MIL. See secs. 754, 743(b); sec. 1.755- 1(b)(1)(ii), Income Tax Regs. The same would be true with respect to any postcontribution unrealized appreciation with respect to MIL’s assets. 21 In their reports, Mr. Frazier

Y23, the portion of such precontribution gain otherwise allocable to a subsequent purchaser of an interest in MIL, see sec. 1.704-3(a)(7), Income Tax Regs., generally would be eliminated if the general partners of MIL were to agree to make a timely sec. 754 election with respect to MIL, see secs. 754, 743(b); sec. 1.755-l(b)(l)(ii), Income Tax Regs. The same would be true with respect to any postcontribution unrealized appreciation with respect to MIL’S assets. In their reports, Mr. Frazier and

Neither partnership ever made a section 754 election.

Fifth, the Kimball reports observed that none of the True partnerships had made section 754 elections, so that a hypothetical purchaser of the subject interests would recognize built-in gain on sales by the partnerships of their assets.

Fifth, the Kimball reports observed that none of the True partnerships had made section 754 elections, so that a hypothetical purchaser of the subject interests would recognize built-in gain on sales by the partnerships of their assets.

Neither partnership ever made a section 754 election.

Bowlen I did not make a section 754 election in 1984.

Bowlen Í did not make a section 754 election in 1984.

e partner's basis for the partnership interest that are not them- selves partnership items, such as the amount that the partner paid to acquire the partnership interest from a transferor partner if that transfer was not covered by an election under section 754. This brings us back to petitioners’ argument in these cases. Petitioners seize upon the statement in the above regulation that an item is not a partnership item to the extent that a determination of the item requires informa-tion other th

e partner's basis for the partnership interest that are not them- selves partnership items, such as the amount that the partner paid to acquire the partnership interest from a transferor partner if that transfer was not covered by an election under section 754. This brings us back to petitioners’ argument in these cases. Petitioners seize upon the statement in the above regulation that an item is not a partnership item to the extent that a determination of the item requires informa-tion other th

e partner's basis for the partnership interest that are not them- selves partnership items, such as the amount that the partner paid to acquire the partnership interest from a transferor partner if that transfer was not covered by an election under section 754. This brings us back to petitioners’ argument in these cases. Petitioners seize upon the statement in the above regulation that an item is not a partnership item to the extent that a determination of the item requires informa-tion other th

p liabilities; other amounts determinable at the partnership level with respect to partnership assets, investments, transactions and operations; guaranteed payments; optional adjustments to basis of partnership property pursuant to an election under section 754; and items relating to contributions to the partnership, distributions from the partnership, and transactions to which section 707(a) applies to the extent that it is determined that the partnership is under an obligation.

e partner's basis for the partnership interest that are not them- selves partnership items, such as the amount that the partner paid to acquire the partnership interest from a transferor partner if that transfer was not covered by an election under section 754. This brings us back to petitioners’ argument in these cases. Petitioners seize upon the statement in the above regulation that an item is not a partnership item to the extent that a determination of the item requires informa-tion other th

e partner's basis for the partnership interest that are not them- selves partnership items, such as the amount that the partner paid to acquire the partnership interest from a transferor partner if that transfer was not covered by an election under section 754. This brings us back to petitioners’ argument in these cases. Petitioners seize upon the statement in the above regulation that an item is not a partnership item to the extent that a determination of the item requires informa-tion other th

e partner's basis for the partnership interest that are not them- selves partnership items, such as the amount that the partner paid to acquire the partnership interest from a transferor partner if that transfer was not covered by an election under section 754. This brings us back to petitioners’ argument in these cases. Petitioners seize upon the statement in the above regulation that an item is not a partnership item to the extent that a determination of the item requires informa-tion other th

e partner's basis for the partnership interest that are not them- selves partnership items, such as the amount that the partner paid to acquire the partnership interest from a transferor partner if that transfer was not covered by an election under section 754. This brings us back to petitioners’ argument in these cases. Petitioners seize upon the statement in the above regulation that an item is not a partnership item to the extent that a determination of the item requires informa-tion other th

e partner's basis for the partnership interest that are not them- selves partnership items, such as the amount that the partner paid to acquire the partnership interest from a transferor partner if that transfer was not covered by an election under section 754. This brings us back to petitioners’ argument in these cases. Petitioners seize upon the statement in the above regulation that an item is not a partnership item to the extent that a determination of the item requires informa-tion other th

e partner's basis for the partnership interest that are not them- selves partnership items, such as the amount that the partner paid to acquire the partnership interest from a transferor partner if that transfer was not covered by an election under section 754. This brings us back to petitioners’ argument in these cases. Petitioners seize upon the statement in the above regulation that an item is not a partnership item to the extent that a determination of the item requires informa-tion other th

p liabilities; other amounts determinable at the partnership level with respect to partnership assets, investments, transactions and operations; guaranteed payments; optional adjustments to basis of partnership property pursuant to an election under section 754; and items relating to contributions to the partnership, distributions from the partnership, and transactions to which section 707(a) applies to the extent that it is determined that the partnership is under an obligation.