# 26 U.S.C. § 754: Manner of electing optional adjustment to basis of partnership property

Source: OLRC release point 119-134 <https://uscode.house.gov/us/usc/119-134/t26/s754>. Cite pinpoints as 26 U.S.C. § 754(a)(1).

If a partnership files an election, in accordance with regulations prescribed by the Secretary, the basis of partnership property shall be adjusted, in the case of a distribution of property, in the manner provided in section 734 and, in the case of a transfer of a partnership interest, in the manner provided in section 743. Such an election shall apply with respect to all distributions of property by the partnership and to all transfers of interests in the partnership during the taxable year with respect to which such election was filed and all subsequent taxable years. Such election may be revoked by the partnership, subject to such limitations as may be provided by regulations prescribed by the Secretary.

## Regulations

- [Treas. Reg. § 1.754-1](/26/reg/1.754-1.md): Time and manner of making election to adjust basis of partnership property. (interprets § 754)

## Final rules

- [87 FR 47931](https://www.federalregister.gov/documents/2022/08/05/2022-16271/streamlining-the-section-754-election-statement) (2022): Streamlining the Section 754 Election Statement
- [64 FR 69903](https://www.federalregister.gov/documents/1999/12/15/99-32400/adjustments-following-sales-of-partnership-interests) (1999): Adjustments Following Sales of Partnership Interests

## Leading cases

- [Quick Trust v. Commissioner, 54 T.C. 1336 (1970)](https://www.courtlistener.com/opinion/4702853/quick-trust-v-commissioner/)
- [Atlantic Veneer Corp. v. Commissioner, 85 T.C. 1075 (1985)](https://www.courtlistener.com/opinion/4706149/atlantic-veneer-corp-v-commissioner/)

## Connections

Cites: § 734 Adjustment to basis of undistributed partnership property where section 754 election or substantial basis reduction; § 743 Special rules where section 754 election or substantial built-in loss

Cited by: § 732 Basis of distributed property other than money; § 734 Adjustment to basis of undistributed partnership property where section 754 election or substantial basis reduction; § 743 Special rules where section 754 election or substantial built-in loss; § 901 Taxes of foreign countries and of possessions of United States

## Amendments

- 1954-08-16: [Act Aug. 16, 1954, ch. 736](/26/act/1954-ch736.md), 68A Stat. 251
- 1976-10-04: [Pub. L. 94-455](/26/act/94-455.md), 90 Stat. 1834