IRS written determination 201528027

Private letter rulings and published taxpayer determination letters. Native document type is retained separately; a determination letter is not labeled a private letter ruling. These taxpayer-specific releases cannot be used or cited as precedent under 26 USC 6110(k)(3); applicability and current legal force are not independently certified. Keep repeated UILC subjects attached to one actual numbered document.

Internal Revenue Service
Department of the Treasury
Washington, DC 20224
Number: 201528027
Release Date: 7/10/2015
Index Number: 754.00-00, 9100.15-00
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Third Party Communication: None
Date of Communication: Not Applicable
Person To Contact:
-------------------, ID No. ----------------
Telephone Number:
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Refer Reply To:
CC:PSI:03
PLR-138685-14
Date:
April 13, 2015
X=-----------------------------------------------------------------
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A=------------------
State=-----------
Date 1=-----------------
Date 2=-----------------
Year=-------
Dear -----------------------:
This responds to a letter dated October 7, 2014, and subsequent
correspondence, submitted on behalf of X by X’s authorized representative, requesting
an extension of time under § 301.9100-3 of the Procedure and Administration
Regulations for X to make an election under § 754 of the Internal Revenue Code.
The information submitted states that X was formed as a limited partnership
under Statelaw on Date 1. On Date 2, A, a partner of X, died and his interest in X
transferred to his spouse. At that time, however, X’s tax advisor did not advise X of the
availability of an election under § 754. Accordingly, X inadvertently failed to timely file a
§ 754 election for Year.
Section 754 provides that if a partnership files an election, in accordance with
the regulations prescribed by the Secretary, the basis of the 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 shall apply 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

PLR-138685-142
which the election was filed and all subsequent taxable years.
Section 1.754-1(b) of the Income Tax Regulations provides that an election
under § 754 to adjust the basis of partnership property under §§ 734(b) and 743(b), with
respect to a distribution of property to a partner or a transfer of an interest in a
partnership, shall be made in a written statement filed with the partnership return for the
taxable year during which the distribution or transfer occurs. For the election to be valid,
the return must be filed not later than the time prescribed by § 1.6031(a)-1(e) (including
extensions therefore) for filing the return for the taxable year.
Section 301.9100-1(c) provides that the Commissioner may grant a reasonable
extension of time to make a regulatory election, or a statutory election (but no more than
6 months except in the case of a taxpayer who is abroad), under all subtitles of the
Internal Revenue Code except subtitles E, G, H, and I. Section 301.9100-1(b) defines
the item “regulatory election” as an election whose due date is prescribed by a
regulation published in the Federal Register or a revenue ruling, revenue procedure,
notice, or announcement published in the Internal Revenue Bulletin.
Sections 301.9100-1 through 301.9100-3 provide the standards the
Commissioner will use to determine whether to grant an extension of time to make the
election. Section 301.9100-2 provides the rules governing automatic extensions of time
for making certain elections. Section 301.9100-3 provides the rules governing
extensions of time for regulatory elections that do not meet the requirements of §
301.9100-2. Under § 301.9100-3, a request for relief will be granted when the taxpayer
provides evidence to establish to the satisfaction of the Commissioner that (1) the
taxpayer acted reasonably and in good faith, and (2) granting relief will not prejudice the
interests of the government.
Based solely on the information submitted and the representations made, we
conclude that the requirements of §§ 301.9100-1 and 301.9100-3 have been satisfied.
As a result, X is granted an extension of time of 120 days from the date of this letter to
make an election under § 754 effective for the Yeartaxable year and thereafter. The
electionshould be made in a written statement filed with the appropriate service center
for association with X’s Yearreturn. A copy of this letter should be attached to the
election.
This ruling is contingent on X adjusting the basis of its properties to reflect any
§ 734(b) or 743(b) adjustments that would have been made if the § 754 election had
been timely made. These basis adjustments must reflect any additional depreciation
that would have been allowable if the § 754 election had been timely made, regardless
of whether the statutory period of limitation on assessment or filing a claim for refund
has expired for any year subject to this grant of late relief. Any depreciation deduction
allowable for an open year is to be computed based upon the remaining useful life and
using property basis as adjusted by the greater of any depreciation deduction allowed or
allowable in any prior year had the § 754 election been timely made. Additionally, the

PLR-138685-143
partners of X must adjust the basis of their interests in X to reflect what that basis would
be if the § 754 election had been timely made, regardless of whether the statutory
period of limitation on assessment or filing a claim for refund has expired for any year
subject to this grant of late relief. Specifically, the partners of X must reduce the basis of
their interests in X in the amount of any additional depreciation that would have been
allowable if the § 754 election had been timely made.
Except as specifically set forth above, no opinion is expressed concerning the
federal tax consequences of the facts described above under any other provision of the
Internal Revenue Code and the regulations thereunder. This ruling is directed only to
the taxpayer requesting it. Section 6110(k)(3) of the Code provides that it may not be
used or cited as precedent.
In accordance with the power of attorney on file with this office, a copy of this
letter is being sent to X’s authorized representative.
The ruling contained in this letter is based upon information and representations
submitted by the taxpayer and accompanied by a penalty of perjury statement executed
by an appropriate party. While this office has not verified any of the material submitted
in support of the ruling request, it is subject to verification on examination.
Sincerely,
Associate Chief Counsel
(Passthroughs and Special Industries)

By:_______________
Holly A. Porter
Chief, Branch 3
Office of Associate Chief Counsel
(Passthroughs & Special Industries)
Enclosures (2):
Copy of this letter
Copy for § 6110 purposes
cc: