754 Elections: Basis Planning for Partnership Interests

In this episode of TFE Talks, attorneys Jordan Goewey and Parker Baker break down the complex topic of Section 754 elections in partnership taxation, explaining when and why these elections matter. Listeners learn the difference between inside and outside basis, the tax implications of partnership interest transfers, and the importance of timely making a 754 election. Key takeaways include being proactive in planning, considering including 754 election provisions in operating agreements, coordinating with accountants to avoid costly tax mistakes, and so much more.Topics in this conversation include: Welcome to Today’s Episode (0:37)What Is a Section 754 Election and When Does It Arise? (3:06)Understanding Inside Basis Versus Outside Basis (5:18)Why Mismatched Basis Matters: 754 Election Relevance (7:04)The Downsides or Risks of a 754 Election (8:53)How to Make the 754 Election and Why Timing Matters (10:14)Biggest Mistake: Failing to Make the Election (10:27)Practical Takeaways for Business Owners and Advisors (11:37)Importance of Planning in Advance with Operating Agreements (12:12)Final Thoughts and Takeaways and Where to Learn More (13:03)TFE Talks: Navigating Wealth, Business, and Legacy is the official podcast from Thomas, Fisher & Edwards, a premier estate planning and business advising law firm in Greenville, South Carolina. Each episode, our attorneys break down complex legal topics—covering estate planning, business strategy, and legacy building—into clear, actionable insights. Whether you're refining a plan with our team or preparing for the future, this podcast serves as your go-to resource for thoughtful, strategic planning. Tune in for guidance that helps you protect what matters most. Learn more at www.tfelawfirm.com.The information provided in this podcast is for general informational purposes only and should not be considered legal advice. Listening to this podcast does not create an attorney-client relationship with Thomas, Fisher & Edwards or any of its attorneys. Laws and regulations vary, and legal matters are highly fact-specific. For personalized legal guidance, please consult with a qualified attorney. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.