A § 754 election is made for a tax year in which the partner recognizes gain or loss on a distribution from the partnership or the basis in distributed property is increased or decreased from the inside basis the partnership held in those assets.The election is made by a partner any time it is necessary to adjust his or her share of the inside basis of partnership assets.

Question

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A § 754 election is made by the partnership, not an individual partner, to adjust the basis of partnership property upon certain distributions or transfers of partnership interests.

A § 754 Election Is Made for a Tax Year