From your first consultation to your K-1 in hand, the PSA is designed to move fast — because your tax deadline doesn't wait.
We review your situation — the size of your taxable event, your state of residence, income type (capital gains or ordinary income), and timing. If the PSA is the right fit, we move forward and begin preparing your operating agreements before your transaction closes.
You bring nothing to close except your deal. No money moves yet.
What you need to qualify: $500,000+ in capital gains, $500,000+ in ordinary income, or $2M+ in retirement assets. Your transaction can be pending or can have already closed within the current tax year.
Your transaction closes normally. Every dollar of your sale proceeds goes directly to you — into your account, under your full control. Nothing is moved, held, or directed without your explicit instruction.
This is a critical distinction: the PSA does not interfere with your closing. You are liquid from day one.
After receiving your proceeds, you fund into the Partnership Special Allocation. For capital gains, this is 16% of your taxable gain. For ordinary income, it is 20% of your tax owed. All legal, accounting, and administrative costs are embedded in this single funding — no retainer fees, no annual fees.
Example: On a $5,000,000 capital gain (California), you fund $800,000. All-in. No additional charges. Within days, $250,000 (5% of your taxable gain) is returned to you as your self-directed investment account — effectively bringing your net cost down to 11% for capital gains.
Within 30 days of funding, you receive three things: your negative Schedule K-1 from the trading partnership (offsetting your taxable gain dollar-for-dollar), your self-directed investment account funded with 5%–7.5% of your taxable amount, and your complete partnership tax returns including Schedules M and B.
Your tax position for the current year is set. You hand the K-1 to your CPA and file accordingly.
Your CPA's role: The PSA works alongside your existing CPA — it doesn't replace them. We provide everything your CPA needs to correctly report the K-1 offset on your tax return. Most CPAs who review the structure and the audit record have no objections.
Your CPA files your return with the K-1 loss applied. Your taxable income or gain is offset to the penny. Your effective tax rate is 11% of your original gain for capital gains events, or 12.5% of your original tax owed for ordinary income events.
If you are ever audited — which 11 clients before you have been — the structure has a documented, successful track record at the federal, state, and appellate levels.
All sale proceeds go to you first. You fund the PSA after receiving them. Your money is never held, pooled, or at risk — the partnership structure is a tax strategy, not an investment lockup.
Operating agreements are drafted and finalized before your transaction closes. You understand exactly what you're agreeing to before any money changes hands.
The PSA offsets income in the current tax year. It must be funded before December 31. If your event closed in January and it's now November, you have weeks — not months.
If your sale, exit, or income event has already occurred in the current tax year, the PSA can still be applied — as long as we act before year-end.
One funding. All legal, accounting, and administrative costs embedded. The 5%–7.5% returned to you as an investment account effectively reduces your true net cost to 11 – 12.5%.
A general legal opinion from qualified tax counsel is available for review. Deal-specific opinions from AmLaw 100-ranked law firms can be arranged — the only cost not embedded in the standard funding.
On a $10,000,000 capital gain, your funding is $1,600,000 — one payment, no future charges. Here is exactly where that capital goes.
| Allocation | Purpose | Amount |
|---|---|---|
| Trading Partnership | Active trading operation partnership | $500,000 |
| Returned to Client | Self-directed investment account — yours to invest freely in the partnership | $500,000 |
| Legal & Accounting | Partnership tax returns, K-1 preparation, compliance | $200,000 |
| Strategy & Advisory | Client coordination and strategy | $400,000 |
Because $500,000 is returned to you immediately as a self-directed investment account, your true net outlay is $1,100,000 — not $1,600,000. That's an effective rate of approximately 11% of the taxable gain for capital gains. For ordinary income, 7.5% of your taxable amount is returned, bringing your effective net cost to approximately 12.5%.
Compare that to the alternative: paying $2,835,000 at your standard 28.35% rate. The PSA saves you $1,735,000 in total — including the $500,000 returned to your pocket.
The process is straightforward. The legal foundation is documented. The track record is real. The only question is whether you qualify — and whether you move before year-end.
See If You Qualify