Private Letter Ruling 202244002, November 4, 2022
In a recent Private Letter Ruling, the Internal Revenue Service granted a partnership 120 days from the date of the letter to make an election under §754 of the Internal Revenue Code based on a finding that it acted reasonably and in good faith, and that granting relief would not prejudice the government’s interests.
The requesting partnership intended to make a §754 election for its most recent taxable year. However, the partnership failed to timely file such election with its partnership return for the taxable year.
Section 754 provides, in part, that if a partnership files an election, in accordance with the regulations prescribed by the Secretary, the basis of partnership property is adjusted in the case of a distribution of property, in the manner provided in § 734, and, in the case of a transfer of a partnership interest, in the manner provided in § 743. Such an election applies with respect to all distributions of property by the partnership and to all transfers of interests in the partnership during the taxable year with respect to which the election was filed and all subsequent taxable years.
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