Title 26 — Internal Revenue CodeRelease 119-73

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

Title 26 › Subtitle Subtitle A— - Income Taxes › Chapter CHAPTER 1— - NORMAL TAXES AND SURTAXES › Subchapter Subchapter K— - Partners and Partnerships › Part PART II— - CONTRIBUTIONS, DISTRIBUTIONS, AND TRANSFERS › Subpart Subpart D— - Provisions Common to Other Subparts › § 754

Last updated Apr 6, 2026|Official source

Summary

A partnership may choose, under rules from the tax official, to adjust the tax value of its property on distributions or when partnership interests are transferred, following sections 734 and 743. The choice applies to that tax year and later years and may be revoked under the rules.

Full Legal Text

Title 26, §754

Internal Revenue Code — Source: USLM XML via OLRC

If a partnership files an election, in accordance with regulations prescribed by the Secretary, the basis of partnership property shall be adjusted, in the case of a distribution of property, in the manner provided in section 734 and, in the case of a transfer of a partnership interest, in the manner provided in section 743. Such an election shall apply with respect to all distributions of property by the partnership and to all transfers of interests in the partnership during the taxable year with respect to which such election was filed and all subsequent taxable years. Such election may be revoked by the partnership, subject to such limitations as may be provided by regulations prescribed by the Secretary.

Legislative History

Notes & Related Subsidiaries

Editorial Notes

Amendments

1976—Pub. L. 94–455 struck out “or his delegate” after “Secretary” wherever appearing.

Reference

Citations & Metadata

Citation

26 U.S.C. § 754

Title 26 — Internal Revenue Code

Last Updated

Apr 6, 2026

Release point: 119-73