Compass Tax Educators

This course covers the optional partnership basis adjustment election under IRC §754, how it affects the partnership, the K-1, and the individual partner or LLC member. The §754 election creates entity level complexity, but it also creates an equitable “fairness” between inside and outside basis for the affected partner or member, which will be demonstrated during the instruction.

Learning Objectives

• Understand why a partner or member might desire the partnership or LLC to make a §754 election.
• Demonstrate what the §754 election looks like on both the entity and partner or member’s return.
• Calculate the required computations for the §754 election for both depreciation and distributions.
• Describe the proper reporting adjustments necessary on the K-1 forms to correctly reflect the §754 items.

Education Information

Length: 100 minutes plus question-and-answer session

Prerequisite: None

Advanced Preparation: None

Program Level: Intermediate