26 U.S. Code § 734 - Adjustment to basis of undistributed partnership property where section 754 election or substantial basis reduction
The basis of partnership property shall not be adjusted as the result of a distribution of property to a partner unless the election, provided in section 754 (relating to optional adjustment to basis of partnership property), is in effect with respect to such partnership or unless there is a substantial basis reduction with respect to such distribution.
The allocation of basis among partnership properties where subsection (b) is applicable shall be made in accordance with the rules provided in section 755.
For purposes of this section, there is a substantial basis reduction with respect to a distribution if the sum of the amounts described in subparagraphs (A) and (B) of subsection (b)(2) exceeds $250,000.
For regulations to carry out this subsection, see section 743(d)(2).
2005—Subsec. (a). Pub. L. 109–135, § 403(bb)(1), inserted “with respect to such distribution” before period at end.
Subsec. (b). Pub. L. 109–135, § 403(bb)(2), reenacted heading without change and amended introductory provisions generally. Prior to amendment, introductory provisions read as follows: “In the case of a distribution of property to a partner, a partnership, with respect to which the election provided in section 754 is in effect or unless there is a substantial basis reduction, shall—”.
2004—Pub. L. 108–357, § 833(c)(5)(A), substituted “Adjustment to basis of undistributed partnership property where section 754 election or substantial basis reduction” for “Optional adjustment to basis of undistributed partnership property” in section catchline.
Subsec. (a). Pub. L. 108–357, § 833(c)(1), inserted “or unless there is a substantial basis reduction” before period at end.
Subsec. (b). Pub. L. 108–357, § 833(c)(2), inserted “or unless there is a substantial basis reduction” after “section 754 is in effect” in introductory provisions.
Subsec. (d). Pub. L. 108–357, § 833(c)(3), added subsec. (d).
Subsec. (e). Pub. L. 108–357, § 833(c)(4), added subsec. (e).
1984—Subsec. (b). Pub. L. 98–369 inserted at end “Paragraph (1)(B) shall not apply to any distributed property which is an interest in another partnership with respect to which the election provided in section 754 is not in effect.”
Amendment by Pub. L. 109–135 effective as if included in the provision of the American Jobs Creation Act of 2004, Pub. L. 108–357, to which such amendment relates, see section 403(nn) of Pub. L. 109–135, set out as a note under section 26 of this title.
Written determinations for this section
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