Page 493

TITLE 26-INTERNAL REVENUE CODE dispositions after Dec. 31, 1975, in taxable years ending after such date, see section 1101(g)(4) of Pub. L. 94-455, set out as an Effective Date of 1976 Amend- ment note under section 995 of this title. Amendment of subsec. (c) by section 1901(a)(93) of Pub. L. 94-455 effective for taxable years beginning after Dec. 31, 1976, see section 1901(d) of Pub. L. 94- 455, set out as an Effective Date of 1976 Amendment note under section 2 of this title. Section 2110(b) of Pub. L. 94-455 provided that: "Subsection (a) [amending subsec. (c) of this section] shall apply to transactions described in sections 731, 736, 741, or 751 of the Internal Revenue Code of 1954 (sections 731, 736, 741, or 751 of this title] which occur after December 31, 1976, in taxable years ending after that date." EFFECTIVE DATE OF 1969 AmxrDamErr Amendment by Pub. L. 91-172 applicable to taxable years beginning after Dec. 31, 1969, see section 211(c) of Pub. L. 91-172, set out as an Effective Date note under section 1251 of this title. EFFECTIVE DATE OF 1966 AmmDMENr Amendment by Pub. L. 89-570 applicable to taxable years ending after Sept. 12, 1966, but only in respect of expenditures paid or incurred after such date see section 3 of Pub. L. 89-570, set out as an Effective Date note under section 617 of this title. EFFECTIVE DATE OF 1964 AMENDMENT Amendment by Pub. L. 88-272 applicable to disposi- tions after Dec. 31, 1963, in taxable years ending after such date, see section 231(c) of Pub. L. 88-272, set out as an Effective Date note under section 1250 of this title. EFFECTIVE DATE OF 1962 AMENDMENT Amendment of subsec. (c) of this section by Pub. L. 87-834 applicable to taxable years beginning after Dec. 31, 1962, see section 13(g) of Pub. L. 87-834, set out as an Effective Date note under section 1245 of this title. Amendment of subsec. (d)(2) of this section by Pub. L. 87-834 applicable with respect to taxable years be- ginning after Dec. 31, 1962, see section 14(c) of Pub. L. 87-834, set out as an Effective Date note under section 1246 of this title. CROSS REFERENCES Extent of recognition of gain or loss on distribution, see section 731 of this title. Recognition and character of gain or loss on sale or exchange, see section 741 of this title. SECTION REERRED TO IN OTHER SECTIONS This section is referred to in sections 617, 731, 732, 735, 736, 741, 1245, 1250 of this title. § 752. Treatment of certain liabilities (a) Increase in partner's liabilities Any increase in a partner's share of the liabil- ities of a partnership, or any increase in a part- ner's individual liabilities by reason of the as- sumption by such partner of partnership liabil- ities, shall be considered as a contribution of money by such partner to the partnership. (b) Decrease in partner's liabilities Any decrease in a partner's share of the li- abilities of a partnership, or any decrease in a partner's individual liabilities by reason of the assumption by the partnership of such individ- ual liabilities, shall be considered as a distribu- tion of money to the partner by the partner- ship. (c) Liability to which property is subject For purposes of this section, a liability to which property is subject shall, to the extent of the fair market value of such property, be con- sidered as a liability of the owner of the proper- ty. (d) Sale or exchange of an interest In the case of a sale or exchange of an inter- est in a partnership, liabilities shall be treated In the same manner as liabilities in connection with the sale or exchange of property not asso- ciated with partnerships. (Aug. 16, 1954, ch. 736, 68A Stat. 251.) § 753, Partner receiving income in respect of decedent The amount includible in the gross income of a successor in interest of a deceased partner under section 736(a) shall be considered income in respect of a decedent under section 691. (Aug. 16, 1954, ch. 736, 68A Stat. 251.) § 754. Manner of electing optional adjustment to basis of partnership property If a partnership files an election, in accor- dance with regulations prescribed by the Secre- tary, the basis of partnership property shall be adjusted, in the case of a distribution of proper- ty, in the manner provided in section 734 and, in the case of a transfer of a partnership inter- est, in the manner provided in section 743. Such an election shall apply with respect to all distri- butions of property by the partnership and to all transfers of interests in the partnership during the taxable year with respect to which such election was filed and all subsequent tax- able years. Such election may be revoked by the partnership, subject to such limitations as may be provided by regulations prescribed by the Secretary. (Aug. 16, 1954, ch. 736, 68A Stat. 251; Oct. 4, 1976, Pub. L. 94-455, title XIX, 1906(b)(13)(A), 90 Stat. 1834.) AMENDMENTS 1976-Pub. L. 94-455 struck out "or his delegate" fol- lowing "Secretary" in two places. CROSS REFERENCES Optional adjustment to basis of- Partnership property, see section 743 of this title. Undistributed partnership property, see section 734 of this title. SECTION REFERRED TO IN OTHER SECTIONS This section referred to in sections 732, 734, 743 of this title. § 755. Rules for allocation of basis (a) General rule Any increase or decrease in the adjusted basis of partnership property under section 734(b) (relating to the optional adjustment to the basis of undistributed partnership property) or section 743(b) (relating to the optional adjust- ment to the basis of partnership property in the case of a transfer of an interest in a part- nership) shall, except as provided in subsection (b), be allocated- (1) in a manner which has the effect of re- ducing the difference between the fair Page 493 § 755