Form 15254: Request for Section 754 Revocation
1 hour 40 minutes
Understand the benefits and detriments of a Section 754 Election and why a Partnership may want to revoke the election.
Section 754 elections by partnerships are usually beneficial to its partners in that it equalizes inside and outside basis and prevents premature recognition of gain by new partners. Once the partnership makes the election, it applies to all subsequent years. However, it is possible that the Section 754 election may be counterproductive and result in the elimination of losses or creates an administrative burden to the partners. The removal of the technical termination provisions eliminated an effective way to revoke the elections without the consent of the Internal Revenue Service.
To streamline applications for revocation of Section 754 elections, the IRS has developed procedures and issued a new Form (Form 15254). The Form requires a statement of reasonable cause for revocation of the election. This course will discuss the benefits and detriments of a Section 754 Election and the reasons why a Partnership may want to revoke the election. It will provide instructions for completing Form 15254 and how to plan for acceptance or denial.
• You will be able to describe the basics of the Section 754 election.
• You will be able to discuss elements of a Section 754 election.
• You will be able to explain the substantial built-in loss rule.
• You will be able to review Section 754 and distributions of property.