§754 — Title 26 Internal Revenue Code | U.S. Code

§754 Manner of Electing Optional Adjustment to Basis of Partnership Property

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

Last updated Apr 6, 2026|Official source

Summary

A partnership may file an election that adjusts the basis of partnership property when property is distributed or when a partnership interest changes hands, using the methods in sections 734 and 743. Once made, the election covers all distributions and all transfers of partnership interests in that tax year and every year after. The partnership can revoke the election, subject to limits set by regulations.

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.

Editorial Notes

Amendments

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

§754 Manner of Electing Optional Adjustment to Basis of Partnership Property

Summary

Title 26, §754

Notes & Related Subsidiaries

Editorial Notes

Amendments

Citations & Metadata