An advanced, federally authorized tax strategy that reduces your capital gains or ordinary income tax rate from as high as 50% down to 11%–12.5% depending on income type.
When you sell a business, a property, or generate significant income, the government takes the largest share it can. Most advisors accept that rate as fixed. We don't.
The Partnership Special Allocation (PSA) is a strategy authorized under Internal Revenue Code §704(b) that systematically reduces your effective rate — legally, compliantly, and with a documented track record of surviving government scrutiny.
Learn About the PSA →The Partnership Special Allocation (PSA) is authorized under IRC §704(b). It allows you to partner with an active trading partnership and receive a K-1 loss allocation that offsets your taxable gain or income — dollar for dollar. The loss is non-passive, requires no material participation, and applies immediately to your current tax year.
Read the Legal Framework →Partnership tax law explicitly permits disproportionate loss allocations — meaning a partner can receive losses far exceeding their ownership percentage, as long as the allocation has "substantial economic effect." The PSA is structured to satisfy every IRS test: economic substance, at-risk rules, and non-passive classification.
See the Audit Record →16% of your taxable gain (capital gains) or 20% of your tax owed (ordinary income) — one payment, all-inclusive. No retainer fees. No annual fees. Within 30 days, 5%–7.5% of your taxable amount is returned to you as a self-directed investment account, bringing your true net cost to approximately 11 – 12.5%. Everything else is included: legal, accounting, and administration.
See the Full Cost Breakdown →A negative Schedule K-1 issued within 30 days of funding. Complete partnership tax returns for your CPA. Your 5%–7.5% self-directed investment account. And access to independent legal opinions from AmLaw 100-ranked counsel — the only item not embedded in the standard funding.
See Real Client Outcomes →Selling your company — asset sale, stock sale, or buyout — and facing a capital gains event that took a lifetime to create. The PSA works for both structures.
Primary residences, investment properties, and commercial real estate with significant embedded equity generating taxable gain above the exclusion.
Executives, professionals, and investors generating $500K+ in ordinary taxable income — where the combined federal and state rate can exceed 50%.
Founders, shareholders, and partners receiving proceeds from a merger, acquisition, or secondary offering with significant taxable gain.
If your transaction closed anywhere in the current tax year, the PSA can still be applied — as long as we act before December 31.
High-net-worth individuals with $2M+ in retirement assets generating large ordinary income events in a single tax year.
We review your situation and prepare operating agreements before your transaction closes. No money moves yet.
Your sale closes normally. Every dollar goes directly to you. You remain fully liquid and in control.
You fund 16% of your taxable gain into the PSA. Within days, 5%–7.5% is returned to your investment account.
Your negative Schedule K-1 and all partnership returns are delivered. Hand them to your CPA and file.
The PSA must be implemented before December 31 for the current tax year. If you have a qualifying event in progress — or one that already closed this year — the window to act is now.
No retainer fees. No annual fees. All costs embedded in a single funding. 5%–7.5% returned to you at close.