A §754 election is made by a distributee partner for a tax year in which (1)the distributee partner recognizes gain or loss on a distribution from a partnership or (2)the distributee partner's basis in distributed assets differs from the partnership's inside basis in those assets.

Question

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A §754 election is made by the partnership, not the distributee partner, to adjust the basis of partnership property in the event of certain distributions or transfers of partnership interests.

A §754 Election Is Made by a Distributee Partner for a Tax