Which of the following statements regarding the Section 754 adjustment is incorrect?
A)Sec.754 permits a basis adjustment to partnership assets upon the sale of a partnership interest.
B)Sec.754 permits a basis adjustment to partnership assets upon certain distributions.
C)The Sec.754 election is made annually by the partnership.
D)The Sec.754 election is intended to prevent inequities that may occur when the bases of partnership assets are not adjusted.

Question

Quizplus · Accepted Answer

The Sec.754 election is not made annually by the partnership. It is made by the partnership in the year it wants to apply the adjustment, and it is irrevocable once made.

Which of the Following Statements Regarding the Section 754 Adjustment