PS: Basis Adjustment Under §754

General Description:

Practitioners will acquire an understanding of the advantages and disadvantages of the §754 election.

Learning Objective:

After completing this course the participant will be able to:

• Determine the timeframe for making the §754 election and extending the time for making the §754 election under Reg. §1.301-9100-2.
• File the statements required to make the election.
• Describe the type of transactions which trigger a basis adjustment under §754 and explain the impact of the §754 election and basis adjustments on current distributions, liquidating distributions, sales and exchanges, death, and retirement.
• Determine the amount of the basis adjustment -- positive and negative -- as well as how the §754 election affects a §704(c) or a reverse §704(c) allocation.
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• Describe the ways of keeping track of the basis adjustment -- balance-sheet adjustment or off-balance-sheet adjustment -- and how the basis adjustment affects a tax basis capital account.
• Determine whether an advisor should recommend a §754 election, especially taking into account the additional cost of keeping track of the basis adjustments.
• Calculate depreciation on the property subject to the basis adjustment.
• Determine the partner's distributive share after the §754 election.
• Describe what happens to the basis adjustment if the entity "checks the box."
• Explain how a tax partnership revokes the §754 election by filing a Form 15254.

Instructors:

Mark A. Vogel is a retired professor and director of the University of Denver Graduate Tax Program, where for 38 years he taught courses in individual, fiduciary, tax accounting, partnership, and corporate taxation. He is the author of Divorce Taxation Guide (John Wiley & Sons) and Individual Taxation (Shepards/McGraw-Hill). He received a J.D. and LL.M. in Taxation from the University of Denver College of Law and an undergraduate accounting degree from the University of Notre Dame. He is also a CPA licensed in Illinois.

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