IRC 754: Partnership and Pass-Through Entity Basis Adjustments

Mastering Election Rules and Tackling Complex Decisions for Distributions and Sales of Interests

Recording of a 110-minute CPE webinar with Q&A


Conducted on Tuesday, March 3, 2015

Recorded event now available

or call 1-800-926-7926
Program Materials

This webinar will provide tax advisors and counsel with an in-depth analysis of the 754 election. The panel will outline best practices for making the 754 election, tax implications of the election, and when to make—and when to avoid—the election.

Description

Sect. 754 is a complex and critical part of the Code for advisors and tax attorneys involved in partnership tax matters. It governs an election for treating basis in the event that an interest in a partnership or an LLC taxed as a partnership is sold at fair market value. There are important implications for depreciation deductions.

The potential for liability claims ups the ante if a 754 election opportunity is either missed or proper judgment is not used regarding why the election was or was not made. Our panel will share their experiences and offer best practices to help you understand, identify and avoid missing Sect. 754 election opportunities. You will hone your knowledge through our panelists’ real world examples about the potential benefits and detriments of a Sect. 754 election.

Tax advisors and attorneys must understand not only the rules but also the practical hows, whys or “why-nots” involved in making a Sect. 754 election. Further, advisors need to be able to know how to perform the complicated adjustment calculations which a 754 election often requires to track inside basis and depreciation to reach the proper reporting on depreciation schedules and partners’ individual K-1s.

Listen as our panel of veteran advisors gives you a drill-down on Sect. 754 and related administrative guidance and translates it into the practical challenges that confront practitioners working on complex partnership tax issues.

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Outline

  1. Sect. 754 key points
    1. Sect. 754 overview
    2. Election decision process
      1. Reasons
      2. Evaluating implications
        1. Step-up
        2. Step-down
  2. Sect. 754 election
    1. Procedures
      1. Filing and notification requirements
  3. Common computation challenges with 743(b) & 734(b) adjustments
  4. 755 basis adjustments

Benefits

The panel will review these and other key points:

  • Sect. 754 election rules: How to make a proper election, and the practical pros and cons of doing so
  • Calculate the asset step-up allowable under Sect. 754
  • Effects of Sect. 754 elections on depreciation when partnership interest or property is distributed or sold
  • Avoiding common basis adjustment mistakes in calculations and reporting

Faculty

Lentine, William
William C. Lentine

Member
Dykema Gossett

Mr. Lentine is experienced in corporate tax matters, partnership taxation, mergers & acquisitions and estate...  |  Read More

Wiesen, Dina A.
Dina A. Wiesen
Senior Manager, National Tax Office, Passthroughs
Deloitte Tax

Ms. Wiesen specializes in partnership taxation, specifically the use of partnerships and limited liability companies in...  |  Read More

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