DESCRIPTION
This module examines Section 754 adjustments, including what they are, when they are triggered, and how they function within partnership taxation. Participants analyze how to identify and distinguish between Section 743(b) and Section 734(b) adjustments and perform the related basis and depreciation computations. Key concepts are reinforced through group-based analysis of realistic fact patterns that require careful reading and accurate calculations. The module also briefly addresses circumstances in which a Section 754 election becomes mandatory and optional material.
LEARNING OBJECTIVES
- Identify transactions and events that trigger a Section 754 adjustment.
- Compare and contrast the differences between §743(b) and §734(b) adjustments.
- Distinguish between Section 743(b) and Section 734(b) adjustments based on relevant fact patterns.
- Compute the §743(b) and §734(b) adjustments and basis allocations.
- Calculate §743(b) and §734(b) depreciation.
- Optional – Discuss purchasing an interest at a premium and a discount.
- Optional – Discuss how intangible assets impact the §754 adjustments.
