#estate-planning

Estate Planning

Tax-efficient strategies for transferring wealth and business assets to the next generation

May 13, 202615 min read

Section 754 Election and 743(b) Basis Adjustments: How Partnerships Step Up Inside Basis When a Partner Buys In or Dies

A Section 754 election triggers a 743(b) inside-basis step-up when a partner dies, sells, or is bought in — preventing heirs and incoming partners from paying tax twice on the same appreciation. This guide covers 743(b) and 734(b) mechanics, Section 755 allocation across asset classes, the substantial built-in loss rule, Form 15254 revocation, and when the administrative cost outweighs the benefit.

Mike Thrift

partnershipstax-planningestate-planning

May 12, 202612 min read

The 65-Day Election: How Trustees Push Income to Beneficiaries and Escape the Brutal 37% Trust Bracket

A fiduciary guide to the Section 663(b) 65-day election and the Section 643(g) Form 1041-T allocation, with the March 6 deadline, DNI mechanics, a worked example saving roughly $11,776 in federal tax, and the procedural traps that void the election.

Mike Thrift

trusttax-planningestate-planning

May 12, 202614 min read

Section 7702 and the Modified Endowment Contract Trap: How Overfunding Cash-Value Life Insurance Triggers LIFO Taxation and a 10% Penalty

Section 7702A's 7-pay test reclassifies overfunded cash-value life insurance as a modified endowment contract, switching lifetime distributions to LIFO ordering, taxing policy loans as ordinary income, and adding a 10% penalty before age 59½. The classification is permanent and cannot be reversed after the 60-day refund window.

Mike Thrift

insurancetax-planningestate-planning

May 11, 202614 min read

Charitable Lead Trust (CLT): How Wealthy Families Transfer Appreciating Assets to Heirs at a Discount in 2026

A practical 2026 guide to the Charitable Lead Trust: how a zeroed-out CLAT uses the 4.6% Section 7520 rate to fund charity, transfer appreciating assets to heirs, and minimize gift and estate tax — with CLAT vs CLUT and grantor vs non-grantor tradeoffs.

Mike Thrift

estate-planningcharitable-givingtax-planning

May 11, 202614 min read

Section 7872 and the AFR Trap: How an Informal Family Loan Triggers Imputed Interest and Gift Tax

Informal family or employer loans below the AFR trigger IRC Section 7872 imputed interest, treated as gifts, wages, or dividends.

Mike Thrift

tax-planningloansestate-planning

May 10, 202613 min read

Valuing a Closely-Held Business: Asset, Income, and Market Approaches for Exits, Buyouts, and Estate Transfers

Three valuation approaches — asset, income, and market — can produce 50% differences in indicated value for the same closely-held business. This guide explains when each fits, how DLOM and DLOC discounts apply, and what records owners need before a sale, partner buyout, or estate transfer.

Mike Thrift

business-valuationsmall-businesssuccession-planning

May 10, 202612 min read

Form 706 Portability and the DSUE: How Surviving Spouses Inherit Up to $30 Million of Federal Estate Tax Exemption

Filing IRS Form 706 to elect portability lets a surviving spouse inherit up to $15 million of unused federal estate tax exemption (the DSUE), shielding combined estates of up to $30 million from the 40% federal estate tax in 2026. Miss the nine-month deadline and Rev. Proc. 2022-32 still allows a late election within five years of death.

Mike Thrift

estate-planningtax-planningtax-compliance

May 10, 202614 min read

Section 6166 Estate Tax Deferral for Closely-Held Businesses: The 14-Year Installment Election in 2026

How executors of closely-held business estates use IRC Section 6166 to defer federal estate tax across 14 years at a 2% rate, with the 2026 inflation-adjusted $1.94M base, the 35% eligibility test, election mechanics, and the acceleration events that kill the deferral.

Mike Thrift

estate-planningtax-planningsuccession-planning

May 10, 202613 min read

Section 754 Election: How Partnerships Use Inside Basis Step-Ups to Save Incoming Partners and Heirs From Phantom Gains

A Section 754 election lets a partnership adjust the inside basis of its assets when an interest transfers or property is distributed, preventing incoming partners and heirs from being taxed on appreciation that economically belonged to the seller. The election is permanent, covers both 743(b) and 734(b) adjustments, and matters most for real estate, family, and professional service partnerships.

Mike Thrift

partnershipstax-planningreal-estate

May 10, 202613 min read

Tax Planning During Divorce: QDROs, Post-TCJA Alimony, and Section 1041 Property Transfers

A practitioner's guide to the tax mechanics of divorce — how a QDRO splits a 401(k) penalty-free, why alimony in agreements executed after 2018 is no longer deductible, how Section 1041 carryover basis can turn a 50/50 settlement into an unequal one, and how the Section 121 home-sale exclusion survives when one spouse moves out.

Mike Thrift

tax-planningtaxpersonal-finance

May 9, 202611 min read

Donor-Advised Funds and the Charitable Bunching Strategy: Beating the 2026 Tax Floor with Concentrated Giving

US OBBBA's 0.5% AGI floor and 35% cap hit in 2026 — how donor-advised fund bunching still clears the federal charitable hurdle.

Mike Thrift

charitable-givingtax-planningtax-deductions

May 9, 202614 min read

ESOP Section 1042 Rollover: How C-Corp Owners Can Sell to Employees and Defer (or Eliminate) Capital Gains Tax

Section 1042 of the IRC lets a C-corporation owner selling shares to an ESOP defer federal capital gains tax indefinitely — and potentially eliminate it through step-up at death. This guide covers the five qualifying conditions, what counts as Qualified Replacement Property, the floating-rate-note diversification strategy, and the trade-offs founders should weigh against a strategic sale.

Mike Thrift

tax-planningcapital-gainsc-corp

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