# Prop. Treas. Reg. § 1.743-1: Optional adjustment to basis of partnership property.

Proposed regulation, not in force. REG-111119-99, 65 FR 1572, published 2000-01-11 <https://www.federalregister.gov/documents/2000/01/11/00-14/partnership-mergers-and-divisions>. Interprets 26 U.S.C. § 743.

Par. 3. Section 1.743-1 is amended by adding two sentences to the end of paragraph (h)(1).

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(h) * * *

(1) * * * When a resulting partnership that is considered a continuation of a merged or consolidated partnership under section 708(b)(2)(A) has a basis adjustment in property held by the merged or consolidated partnership that is considered terminated under Sec. 1.708-1(c)(1) (as a result of the resulting partnership acquiring an interest in such merged or consolidated partnership, see Sec. 1.708- 1(c)(3)), the resulting partnership will continue to have the same basis adjustments with respect to property distributed (see Sec. 1.708- 1(c)(4), Example 4(v)) by the terminated partnership to the resulting partnership, regardless of whether the resulting partnership makes a section 754 election. The portion of the resulting partnership's adjusted basis in its assets attributable to the basis adjustment with respect to the property distributed by the terminating partnership must be segregated and allocated solely to the partners who were partners in the resulting partnership immediately before the merger or consolidation.

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