On partner death or interest sale, §754 election steps up inside basis to FMV — restart depreciation.
By default when a partner dies or sells their interest, only OUTSIDE basis (their capital account) steps up — inside basis of partnership assets stays put, so heir or buyer gets no new depreciation. A §754 election (with §743(b) adjustment for transfers, §734(b) for distributions) steps up inside basis to fair market value for that partner's share, restarting depreciation on their allocated portion of buildings, equipment, and goodwill. Once elected, applies to ALL future transfers (irrevocable without IRS consent). Massive value for real estate partnerships and family LLCs with appreciated property.
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Borrow against cash-value life insurance at guaranteed rates.
Deduct 60–80% of working-interest investment in year 1.
Insure your own business risks — premiums are deductible.
Hedge funds + alternative assets inside a tax-free wrapper.
Sell appreciated assets tax-free + get lifetime income + charitable deduction.
Deduct now at FMV, grant to charity later — skip cap gains.
Lock in the $13.6M estate exemption before 2026 sunset.
Transfer appreciation to heirs with near-zero gift tax.