I visited this wonderful section a couple months ago, and was advised by some knowledgeable folks to use it to appreciate partnership property acquired in 1962.
I had read of §754 in TTB but never had "hands on" experience using it, and frankly avoided it because I wasn't smart enough to figure out the "downside."
So now, I ask again, just what exactly IS the "downside"? It does not appeal to my intuition for IRS to allow avoiding historical gains by re-valuing property upward in one fell swoop. And sure enough, TTB puts in a caveat that once the election is made, it cannot be revoked without IRS permission.
This begs the question, "Why would anyone ever WANT to revoke the election, after having wanted to avoid gains in the first place."
The §754 upward valuation just seems too good to be true. It is similar to "stepped up basis" only it is an entity and not an individual.
What am I missing??
I had read of §754 in TTB but never had "hands on" experience using it, and frankly avoided it because I wasn't smart enough to figure out the "downside."
So now, I ask again, just what exactly IS the "downside"? It does not appeal to my intuition for IRS to allow avoiding historical gains by re-valuing property upward in one fell swoop. And sure enough, TTB puts in a caveat that once the election is made, it cannot be revoked without IRS permission.
This begs the question, "Why would anyone ever WANT to revoke the election, after having wanted to avoid gains in the first place."
The §754 upward valuation just seems too good to be true. It is similar to "stepped up basis" only it is an entity and not an individual.
What am I missing??