TITLE 26. INTERNAL REVENUE CODE § 734. Adjustment to basis of undistributed partnership property where section 754 election or substantial basis reduction., 26 USCS § 734

Summary

(a) General rule. The basis of partnership property shall not be adjusted as the result of a distribution of property to a partner unless the election, provided in section 754 [26 USCS § 754] (relating to optional adjustment to basis of partnership property), is in effect with respect to such partnership or unless there is a substantial basis reduction with respect to such distribution.

(b) Method of adjustment. In the case of a distribution of property to a partner by a partnership with respect to which the election provided in section 754 [26 USCS § 754] is in effect or with respect to which there is a substantial basis reduction, the partnership shall—

(1) increase the adjusted basis of partnership property by—

(A) the amount of any gain recognized to the distributee partner with respect to such distribution under section 731(a)(1) [26 USCS § 731(a)(1)], and

(B) in the case of distributed property to which section 732(a)(2) or (b) [26 USCS § 732(a)(2) or (b)] applies, the excess of the ...