Oct 16 – Dec 31 · Planning Season
2026 Year-End Planning Summary
The retiring partner's buyout is a one-time window to make a §754 election worth an estimated $9,000–$14,000/year in incremental depreciation to the remaining partners, plus a guaranteed-payment classification review worth ~$4,000–$7,000 of SE tax exposure.
Each move as a range, stepping down from the current-path liability.
§754 election to step up inside basis on the retiring partner's buyout
Guaranteed-payment classification review for the two working partners
Addressed by the plan
2 of 2 quantified
Time-sensitive moves before December 31.
Multi-year planning to revisit beyond this season.
Items to resolve before the client conversation.
The partnership has relied on capital-account balances as a proxy for partner basis, but the two are not the same computation — capital accounts do not include a partner's share of partnership liabilities, which basis under §704(d) does. Before the §754 step-up is computed, the underlying inside-basis figures need to be confirmed independent of the capital accounts, and each remaining partner's own basis and at-risk position should be reconstructed so the buyout's downstream effects on loss deductibility are understood.
Elan
Grounded on Kwame Osei
Nothing outstanding for Kwame Osei right now.
Elan brought this to you
Nothing needs you for Kwame Osei right now.