9100 extension to make a late § 754 election after a partner's death

Plain-English summary

A limited liability company taxed as a partnership had a partner die. A partner's death transfers the partnership interest, which can leave the partnership's basis in its assets (inside basis) out of step with the successor's basis in the interest (outside basis). A Section 754 election lets the partnership adjust the inside basis under § 743(b) (and § 734(b) for distributions) to align the two, typically giving the successor added depreciation or a smaller future gain. This LLC failed to make the § 754 election for the year the partner died because its tax advisors at the time did not tell it the election was available. It asked the IRS for "9100 relief." The IRS found the LLC acted reasonably and in good faith and that relief will not prejudice the government, and granted 120 days from the date of the letter to make the election on an amended partnership return (Form 1065-X or Form 8082). The relief carries the usual conditions: the basis adjustments must be made as if the election had been timely (even for closed years), any BBA administrative-adjustment-request steps under § 6227(b) must be followed, and the affected partners must conform their outside basis. The extension is not a ruling that the LLC is otherwise eligible to make the election. (This is a companion to PLR 202623010, issued the same day.)

Ruling snapshot

• Question: May the LLC get an extension of time to make a late § 754 election for the year a partner died?
• Outcome: Approved (9100 relief granted; 120 days from the date of the letter to make the election)
• Key authorities: IRC § 754; § 734(b); § 743(b); Treas. Reg. § 1.754-1(b); Treas. Reg. § 301.9100-1 through § 301.9100-3

Full text (IRS public release)

Internal Revenue Service
Department of the Treasury
Washington, DC 20224

Number: 202623009
Third Party Communication: None
Release Date: 6/5/2026
Date of Communication: Not Applicable
Index Number: 9100.15-00, 754.00-00
Person To Contact:
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Telephone Number:
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Refer Reply To:
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CC:PSI:B03
PLR-116876-25
Date:
March 05, 2026

LEGEND

X = -------------------------
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State = ---------------

A = -------------------------

Date 1 = ----------------

Date 2 = ---------------------------

Date 3 = --------------------------

Dear --------------:

This letter responds to a letter dated September 12, 2025, submitted on behalf of X by its authorized representatives, requesting an extension of time under § 301.9100-3 of the Procedure and Administration Regulations to file an election under § 754 of the Internal Revenue Code ("Code").

FACTS

The information submitted states X is a limited liability company formed under the laws of State and is classified as a partnership for federal tax purposes. A, a partner in X, died on Date 1. X failed to make a § 754 election for taxable year ended Date 2 because its tax advisors at the time failed to advise X about the availability of making the election. X represents that it has acted reasonably and in good faith, and that granting relief will not prejudice the interests of the Government.

LAW

Section 754 provides that if a partnership files an election, in accordance with the regulations prescribed by the Secretary, the basis of partnership property is adjusted, in the case of a distribution of property, in the manner provided in § 734 and, in the case of a transfer of a partnership interest, in the manner provided in § 743. Such an election shall apply with respect to all distributions of property by the partnership and to all transfers of interests in the partnership during the taxable year with respect to which the election was filed and all subsequent taxable years.

Section 1.754-1(b) of the Income Tax Regulations provides that an election under § 754 to adjust the basis of partnership property under §§ 734(b) and 743(b), with respect to a distribution of property to a partner or a transfer of an interest in a partnership, shall be made in a written statement filed with the partnership return for the taxable year during which the distribution or transfer occurs. For the election to be valid, the return must be filed not later than the time prescribed by § 1.6031(a)-1(e) (including extensions thereof) for filing the return for that taxable year.

Section 301.9100-1(c) provides that the Commissioner may grant a reasonable extension of time under the rules set forth in §§ 301.9100-2 and 301.9100-3 to make a regulatory election, or a statutory election (but no more than 6 months except in the case of a taxpayer who is abroad), under all subtitles of the Code except subtitles E, G, H, and I. Section 301.9100-1(b) provides that the term "regulatory election" includes an election whose due date is prescribed by a regulation published in the Federal Register.

Sections 301.9100-1 through 301.9100-3 provide the standards that the Commissioner will use to determine whether to grant an extension of time to make an election. Section 301.9100-2 provides automatic extensions of time for making certain elections. Section 301.9100-3 provides rules for requesting extensions of time for regulatory elections that do not meet the requirements of § 301.9100-2.

Section § 301.9100-3 provides that requests for relief will be granted when the taxpayer provides the evidence (including affidavits described in § 301.9100-3(e)) to establish to the satisfaction of the Commissioner that (1) the taxpayer acted reasonably and in good faith, and (2) the grant of relief will not prejudice the interests of the Government.

CONCLUSION

Based solely on the information submitted and the representations made, we conclude that the requirements of §§ 301.9100-1 and 301.9100-3 have been satisfied.
As a result, X is granted an extension of time of 120 days from the date of this letter to make an election under § 754 effective for X's taxable year ending on Date 2 and thereafter. The election should be made in a written statement filed with the appropriate service center accompanying Form 1065-X, Amended Return or Administrative Adjustment Request (AAR), or Form 8082, Notice of Inconsistent Treatment or AAR, and for any related filings as instructed in Form 1065-X or Form 8082, as appropriate, for X's taxable year ended Date 3, to be associated with X's return for its taxable year ended Date 2. A copy of this letter should be attached to the relevant filing.

This ruling is contingent on X's relevant filing(s) containing adjustments to the basis of X's properties to reflect any § 734(b) or § 743(b) adjustments that would have been made if the § 754 election had been timely made. These basis adjustments must reflect any additional deductions for recovery of basis related to X's property that would have been allowable if the § 754 election had been timely made, regardless of whether the statutory period of limitations on assessment or filing a claim for refund has expired for any year subject to this grant of late relief. Any deductions for recovery of basis allowable for an open year are to be computed based on the remaining useful life or recovery period and using property basis adjusted by the greater of such deductions allowed or allowable in any prior year had the § 754 election been timely made.

If the partnership is required to file an AAR to properly amend a partnership return, then this ruling is also contingent on X filing Form 1065-X or Form 8082 and accounting for the adjustments required by § 6227(b).

Additionally, the affected partners of X must adjust the basis of their interests in X to reflect what the basis would be if the § 754 election had been timely made, regardless of whether the statutory period of limitations on assessment or filing a claim for refund has expired for any year subject to this grant of late relief. Specifically, the partners of X must reduce the basis of their interests in X in the amount of any additional deductions for the recovery of basis related to X's property that would have been allowable if the § 754 election had been timely made.

Except for the specific ruling above, we express or imply no opinion concerning the federal tax consequences of the facts of this case under any other provision of the Code. In addition, § 301.9100-1(a) provides that the granting of an extension of time for making an election is not a determination that the taxpayer is otherwise eligible to make the election.

Further, we express or imply no opinion concerning the assessment of any interest, additions to tax, additional amounts, or penalties for failure to file a timely income tax or information return with respect to any taxable year that this ruling may affect. For example, we express or imply no opinion as to whether a taxpayer is entitled to relief from any penalty on the basis that the taxpayer has reasonable cause for failure to file timely any income tax or information returns.

The ruling contained in this letter is based on information and representations submitted by the taxpayer and accompanied by a penalty of perjury statement executed by an appropriate party. While this office has not verified any of the material submitted in support of the ruling request, it is subject to verification on examination.

This ruling is directed only to the taxpayer requesting it. Section 6110(k)(3) of the Code provides that it may not be used or cited as precedent.

In accordance with a power of attorney on file with this office, we are sending a copy of this letter to your authorized representatives.

Sincerely,

Associate Chief Counsel
(Passthroughs, Trusts, and Estates)

By: _______
Brian J. Barrett
Senior Technician Reviewer, Branch 3
Office of the Associate Chief Counsel
(Passthroughs, Trusts, and Estates)

Enclosure:
Copy for § 6110 purposes
cc: -----------------------------------
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