IRS Form 15254 Request for Section 754 Revocation

Form

15254

(January 2021)

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Department of the Treasury - Internal Revenue Service

OMB Number
1545-9999

Request for Section 754 Revocation
▶ Go to www.irs.gov/Form15254 for instructions and the latest information.

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Name of partnership
Employer identification number

Principal business activity code number (see instructions)

Number, street, and room or suite no. If a P.O. box, see the instructions.
City or town, state or province, country, and ZIP or foreign postal code
Tax year end section 754 election was made (MM/DD/YYYY)

Revocation tax year begins (MM/DD/YYYY)

Name of contact person (see instructions)

Contact person’s telephone number

If Form 2848, Power of Attorney and Declaration of Representative, is attached (see instructions for when Form 2848 is required),
check this box . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Caution: In order to prevent delays in processing this request, the partnership must provide all information required by Form 15254.
Include any documentation in support of the request even if not specifically requested by Form 15254 and its instructions.

Part I - Information for All Requests

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1. Has the partnership previously revoked a section 754 election? See instructions .

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Yes

No

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No

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Yes

No

b. Has there been a substantial increase in the assets of the partnership or a change in the character of
partnership assets . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Yes

No

c. Has there been, or is there expected to be, an increased frequency of retirements or shifts of
partnership interests . . . . . . . . . . . . . . . . . . . . . . . .

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Yes

No

3. Will the revocation of the section 754 election result in an avoidance of a reduction in the basis of
partnership assets under section 734(b) or section 743(b)? If yes, provide documentation of the amount.
See instructions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Yes

No

2. Does the section 754 election result in or is it expected to result in a substantial administrative burden to the
partnership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
a. Has the nature of the partnership’s business changed, or is it expected to change .

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Part II - Reason for the Request
In the space provided below, tell us why the partnership is filing this revocation request. Attach additional statements if needed. Attach
supporting documents. See instructions.

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Sign
Here

Under penalties of perjury, I declare that I have examined this form, including accompanying schedules and statements, and to the best of my knowledge
and belief, the form contains all the relevant facts relating to the request, and it is true, correct, and complete. Declaration of preparer (other than partner or
limited liability member) is based on all information of which preparer has any knowledge.

Signature
Type or print name below signature.

Print/Type preparer’s name

Paid
Preparer
Use Only

Date
Telephone number

Preparer’s signature

Date
Check
if
self-employed

Firm’s name

Firm’s EIN

Firm’s address

Phone no.

Catalog Number 74336R

www.irs.gov

For Privacy Act and Paperwork Reduction Act Notice, see the separate instructions.

PTIN

Form 15254 (1-2021)

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Instructions for Form 15254, Request for Section 754 Revocation
respect to the distributee partner is more than $250,000. See
sections 734(b) and (d)(1).

General Instructions
Section references are to the Internal Revenue Code unless
otherwise noted.

Who Must File

Future Developments
For the latest information about developments related to Form
15254 and its instructions, such as legislation enacted after they
were published, go to www.irs.gov/form15254.

Purpose of Form
File Form 15254 to request a section 754 election revocation.

Generally, the partnership must file a separate Form 15254 for
each partnership seeking consent to revoke its section 754
election.

When to File
An application to revoke a section 754 election must be filed no
later than 30 days after the close of the partnership taxable year
with respect to which revocation is intended to take effect. See
Regulations section 1.754-1(c)(1).

Examples of situations which may be considered sufficient reason
for approving an application for revocation include a change in the
nature of the partnership business, a substantial increase in the
assets of the partnership, a change in the character of partnership
assets, or an increased frequency of retirements or shifts of
partnership interests, so that an increased administrative burden
would result to the partnership from the election. However, no
application for revocation of a section 754 election shall be
approved when the purpose of the revocation is primarily to avoid
stepping down the basis of partnership assets upon a transfer or
distribution. See Regulations section 1.754-1(c).

Where to File

Section 754 Election

Name(s) and Signature(s)

Under section 754, a partnership may elect to adjust the basis of
partnership property when property is distributed or when a
partnership interest is transferred. Once an election is made
under section 754, it applies to all distributions and to all transfers
made during the tax year and in all subsequent years unless the
election is revoked.

Enter the name of the partnership on the first line of page 1 of
Form 15254.

If there is a distribution of property, see section 734(b) and the
related regulations.

To revoke a section 754 election, the partnership must file the
revocation Form 15254 request at following address:
Department of the Treasury
Internal Revenue Service Center
Ogden, UT 84201-0011
The partnership will receive a letter either approving or denying
the request.

Specific Instructions

In general, Form 15254 is filed by the partnership. Form 15254
must be signed by any one of the partners or limited liability
company members. Enter that person’s name and official title in
the space provided.

Employer Identification Number

If there is a transfer of a partnership interest, see section 743(b)
and the related regulations. If the basis of partnership property
has been adjusted for a transferee partner under section 743(b),
the partnership must adjust the transferee’s distributive share of
the items of partnership income, deduction, gain, or loss in
accordance with Regulations section 1.743-1(j)(3) and (4).

Section 743(b) Substantial Built-in Losses
Regardless of whether a section 754 election is in place, the
partnership must adjust the basis in property having a substantial
built-in loss immediately after a transfer of a partnership interest.
A partnership has a substantial built-in loss with respect to a
transfer of an interest in the partnership if • the partnership's adjusted basis in partnership property
exceeds by more than $250,000 the fair market value of such
property, or

Enter the partnership’s employer identification number on the
second line of Form 15254.

Principal Business Activity Code
Enter the 6-digit principal business activity (PBA) code of the
partnership. The principal business activity of the partnership is
the activity generating the largest percentage of its total receipts.
See the Form 1065 instructions for the partnership’s PBA code
and definition of total receipts.

Address
Include the suite, room, or other unit number after the street
address. If the post office does not deliver mail to the street
address and the filer has a P.O. box, show the box number
instead of the street address.

• the transferee partner would be allocated a loss of more than
$250,000 if the partnership assets were sold for cash equal to
their fair market value immediately after such transfer.
See sections 743(b) and (d).

If the partnership receives its mail in care of a third party (such as
an accountant or an attorney), enter “C/O” on the street address
line, followed by the third party’s name and street address or P.O.
box.

Section 734(b) Substantial Basis Reductions

If the partnership’s address is outside the United States or its
possessions or territories, enter the information on the line for
“City or town, state or province, country, and ZIP or foreign
country code”. Follow the foreign country’s practice in placing the
postal code in the address. Do not abbreviate the country name.

In the case of partnership distributions, the partnership must
reduce the basis of its assets under section 734(b) if the sum of
(i) the amount of a distributee partner’s loss on the distribution
and (ii) the basis increase in the distributed properties with
Catalog Number 74336R

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www.irs.gov

Form 15254 (1-2021)

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If the partnership changes its mailing address or the
responsible party after filing its return, it can notify the IRS
by filing Form 8822-B, Change of Address or Responsible
Party –Business.

Tax Year End Section 754 Election Was Made
The year the section 754 election was made is the last day of the
tax year for which the election was attached to the return for that
year.
Example. A calendar year taxpayer attached the section 754
election to its Form 1065 filed for the tax year ending December
31, 2013. The year the section 754 election was made is 2013 or
December 31, 2013.

Revocation Tax Year Begins
The revocation tax year begins on the first day of the tax year the
partnership requests the revocation of its section 754 election to
take effect.
Example. A calendar year taxpayer filed a section 754 election
for the tax year ending December 31, 2011 and applied the
provisions of section 734(b) and 743(b) from 2011 to 2017. The
revocation request was filed within 30 days after the close of the
December 31, 2018 tax year. The revocation tax year is calendar
year 2018 or January 1, 2018.

Contact Person
Any Partner or LLC Member

Option to Receive Correspondence by Fax
A partnership that wants to receive, or wants its authorized
representative to receive, correspondence regarding its Form
15254 (for example, additional information letters) by fax must
attach to Form 15254 a statement requesting this service. The
attachment also must list the authorized name(s) and fax number
(s) of the person(s) who is to receive the fax. The listed person(s)
must be either authorized to sign Form 15254 or an authorized
representative of the filer that is included on Form 2848. For
further details on fax procedures, see section 9.04(3) of Rev.
Proc. 2020-1, or successor revenue procedure.

Paid Preparer’s Information
If a partner, member, or employee of the partnership completes
Form 15254, the paid preparer’s space should remain blank. In
addition, anyone who prepares Form 15254 but doesn’t charge
the partnership should not complete this section.
Generally, anyone who is paid to prepare Form 15254 must do
the following.
• Sign the form in the space provided for the preparer’s
signature.
• Fill in the other blanks in the “Paid Preparer Use Only” area of
the form. A paid preparer cannot use a social security number
in the “Paid Preparer Use Only” box. The paid preparer must
use a preparer tax identification number (PTIN).

Form 2848, Power of Attorney and
Declaration of Representative
Authorization to (1) represent the filer before the IRS, (2) receive
a copy of the decision letter, or (3) perform any other act(s) must
be properly reflected on Form 2848. For further details for an
authorized representative and a power of attorney, see sections
9.03(8) and (9) of Rev. Proc. 2020-1 or successor revenue
procedure.

TIP

A paid preparer may sign original or amended returns
by rubber stamp, mechanical device, or computer
software program.

Part I–Information for All Requests
Line 1. Answer “Yes” if the partnership revoked or requested
permission to revoke a section 754 election in the past. Provide
the effective date of any such revocation in Part II-Reason for the
Request of this form.
Line 2. Answer “Yes” if the section 754 election resulted in or is
expected to result in a substantial administrative burden to the
partnership. Provide an explanation in Part II-Reason for the
Request of this form.
Line 2a. Answer “Yes” if the nature of the partnership’s business
has changed or is expected to change. Provide an explanation in
Part II-Reason for the Request of this form.
Line 2b. Answer “Yes” if there has been a substantial increase in
the assets of the partnership or a change in the character of
partnership assets. Provide an explanation in Part II-Reason for
the Request of this form.

A Form 2848 must be attached to Form 15254 in order for the
IRS to discuss a Form 15254 with the filer’s representative, even
if the filer’s representative prepared and/or signed the Form
15254.

Line 2c. Answer “Yes” if there has been, or there is expected to
be, an increased frequency of retirements or shifts of partnership
assets. Provide an explanation in Part II-Reason for the Request
of this form.

If the partnership intends to have the authorized
! representative receive copies of correspondence
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Line 3. Answer “Yes” if the revocation is expected to result in an
avoidance of a reduction in the basis of partnership assets under
section 734(b) or section 743(b).

regarding its Form 15254, it must check the appropriate
box on Form 2848.

Catalog Number 74336R

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• Give the partnership a copy of the form in addition to the copy
to be filed with the IRS.

The contact person must be a partner or LLC member authorized
to sign Form 15254, or the filer’s authorized representative. If this
person is someone other than the partner or LLC member
authorized to sign Form 15254, you must attach Form 2848,
Power of Attorney and Declaration of Representative. When the
Form 1065 return is made for a partnership by a receiver, trustee,
or assignee, the fiduciary must sign the Form 15254, instead of
the partner or LLC member. Returns and forms signed by a
receiver or trustee in bankruptcy on behalf of a partnership must
be accompanied by a copy of the order or instructions of the court
authorizing signing the return or form.

CAUTION

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Form 15254 (1-2021)

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Part II–Reason for the Request

Paperwork Reduction Act Notice

Provide the rationale for requesting revocation of the section 754
election in the space provided on the form and/or in attachments.
If you answered “Yes” to any of the questions in lines 2 or 3,
provide details on the nature of the changes and the
circumstances leading to the changes. Supporting documents
include but are not limited to: the background, nature and
structure of the business entity; a copy of the original section 754
election; a copy of a prior request for revocation of a prior section
754 election, including any correspondence with the Internal
Revenue Service, section 734(b) and/or section 743(b)
calculations which apply to the revocation tax year if the
revocation were denied; partner Schedule(s) K-1 showing how
the section 734(b) and/or section 743(b) adjustments were
allocated to the partner(s); depreciation and/or amortization
schedules; and valuation(s).

Approval or Denial of Revocation Request
The Internal Revenue Service will notify the partnership of the
revocation’s receipt for processing by contacting the partnership
at the address listed on Form 15254 whether its request for
permission to revoke its section 754 election is approved or
denied.

We ask for the information on this form to carry out the Internal Revenue
laws of the United States. You are required to give us the information. We
need it to ensure that you are complying with these laws and to allow us
to figure and collect the right amount of tax.
You are not required to provide the information requested on a form that
is subject to the Paperwork Reduction Act unless the form displays a valid
OMB control number. Books or records relating to a form or its
instructions must be retained if their contents may become material in the
administration of any Internal Revenue law. Generally, tax returns and
return information are confidential, as required by section 6103.

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The time needed to complete and file this form will vary depending on
individual circumstances. The estimated average time is
Recordkeeping .

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. 3 hrs., 16 min.

Learning about the law or the form

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. 0 hrs., 34 min.

Preparing and sending the form to the IRS .

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. 1 hr., 15 min.

If you have comments concerning the accuracy of these time estimates or
suggestions for making this form simpler, we would be happy to hear from
you. You can write to the Internal Revenue Service, Tax Forms and
Publications, SE:W:CAR:MP:TFP, 1111 Constitution Ave. NW, IR-6526,
Washington, DC 20224. Do not send the form to this address. Instead,
see Where To File above.

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Catalog Number 74336R

www.irs.gov

Form 15254 (1-2021)