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I am preparing a partnership tax return for 2016. The

partnership holds commercial rental property...
I am preparing a partnership tax return for 2016. The partnership holds commercial rental property. one of the partners, 50%owner, passed away in April 2016 and left his interest to his spouse. i would like to make a section 754 election. I have an appraisal for her portion of the property. i would like to record her portion of the increase in basis on the books and calculate depreciation on this. the question here is should the depreciation calculated on the step up in basis be allocated only to the spouse or do all of the partners receive the benefit of the step up depreciation?
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Customer reply replied 1 year ago
In addition to the depreciation question, should i remove 50% of the "old" basis and replace it with the new basis for this step up when recording?
Answered in 27 minutes by:
8/10/2017
PDtax
PDtax, Certified Public Accountant (CPA)
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If you do execute a 754 election, the step up only applies to the electing partner.I like to set up an asset like "754 bldg step up JoAnn Jones" and depreciate it as a new asset ands allocate 100% of the new depreciation to Joann''s income or loss.The existing building depreciation and basis does not change. It's like a new asset was placed in service.Thanks for using just answer today. Positive feedback on our rating scale completes your request. I'm PDtax.
PDtax
PDtax, Certified Public Accountant (CPA)
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