Which of the following is a valid reason for making a 754 election?
A)An incoming partner pays more for a partnership interest that his or her proportionate share of partnership assets.
B)Partners are able to increase their basis in the partnership interest upon the sale of a partnership interest.
C)Partnerships can increase, but not decrease, their basis in partnership assets.
D)A partnership can reduce its basis in assets upon cash distributions to partners.

Question

Quizplus · Accepted Answer

A 754 election allows a partnership to adjust the basis of its assets when there is a transfer of a partnership interest or a distribution of property, which can be beneficial when an incoming partner pays more than their proportionate share of the partnership's assets.

Which of the Following Is a Valid Reason for Making