Section 199A: 754 Basis included as Qualified Property? - Spidell

Section 199A: 754 Basis included as Qualified Property?

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Message Board Section 199A: 754 Basis included as Qualified Property?

This topic contains 1 reply, has 2 voices, and was last updated by Sandy Weiner 8 months, 3 weeks ago.

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  • #139415
    James henderson
    Participant

    Hi,

    It is unclear to me whether a partnership that has a 754 basis adjustment in its underlying property may include the step-up it in qualified property for purposes of the QBI calculation.  Please advise. It looks like it does to me, but am ambivalent.

  • #139882
    Sandy Weiner
    Participant

    It may. A section 743(b) basis adjustment, caused by a section 754 election, is counted as UBIA for the section 199A calculation. That was not originally the case, but the IRS changed its mind when it finalized the regulations on January 18.