6. Gain attributable to Sec. 751 properties is determined by comparing the portion of the amount realized attributable to those properties (if no allocation is made, allocate based on relative fair market values) with the partner’s fractional share of the partnership basis in those assets (note – the adjusted basis of uncollected receivables of a cash-basis taxpayer is 7. The Sec. 751 gain should always be determined first, and this amount is fully recognized, even if greater than total gain on the sale. The gain or loss on the remaining non-Sec. 751 assets is whatever is left.).
It is very important to file the I-751 within the correct window of time, and be sure not to file it before the 90-day window. If you file it too early, they will send your application back. You may file at any time during the 90 day window, but it is prudent to file fairly early in the window.