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    Zeyad El-sayed
    A partnership must make adjustments to the basis of its property under Internal Revenue Code Section 743 when a partnership interest is transferred by sale, exchange, or death if the partnership has a substantial built-in loss of more than $250,000. A partnership must also make downward adjustments under Section 734 when there is a substantial basis reduction of more than $250,000 due to a partnership distribution.

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    A partnership must make adjustments to the basis of its property under Internal Revenue Code Section 743 when a partnership interest is transferred by sale, exchange, or death if the partnership has a substantial built-in loss of more than $250,000. A partnership must also make downward adjustments under Section 734 when there is a substantial basis reduction of more than $250,000 due to a partnership distribution.

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    A partnership must make adjustments to the basis of its property under Internal Revenue Code Section 743 when a partnership interest is transferred by sale, exchange, or death if the partnership has a substantial built-in loss of more than $250,000. A partnership must also make downward adjustments under Section 734 when there is a substantial basis reduction of more than $250,000 due to a partnership distribution.

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    10 views2 pages

    Scan 0013

    Uploaded by

    Zeyad El-sayed
    A partnership must make adjustments to the basis of its property under Internal Revenue Code Section 743 when a partnership interest is transferred by sale, exchange, or death if the partnership has a substantial built-in loss of more than $250,000. A partnership must also make downward adjustments under Section 734 when there is a substantial basis reduction of more than $250,000 due to a partnership distribution.

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    MODULE 35 TAXES: PARTNERSHIPS 535

    14. Mandatory Adjustments to Basis of Partnership Property


    15. A partnership is required to make a Sec. 743 adjustment to the basis of partnership property upon
    a
    transfer of a partnership interest by sale or exchange or on the death of a partner if the partnership has
    a substantial built-in loss immediately after such transfer. For this purpose, a partnership has a sub-
    stantial built-in loss if the partnership's adjusted basis for partnership property exceeds the FMV of
    such property by more than $250,000.
    16. A partnership is required to make a Sec. 734 downward basis adjustment to partnership property
    in the
    event of it partnership distribution with respect to which there is a substantial basis reduction. For this
    purpose, a substantial basis reduction means a downward adjustment of more than $250,000 that
    would be made to the basis of partnership property if a Sec. 754 election were in effect with respect to
    the distribution.

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