An empty industrial floor under skylights

Who We Serve

Business Owners

High K-1 income, a stack of entities, and a structure nobody has revisited since it was set up.

Pass-through income arrives whether or not it is distributed, your entity structure was probably designed for a business you no longer run, and the single largest asset you own is the one you work inside every day.

The position

What this situation actually looks like.

A business owner at this income level is usually carrying three problems at once and has time to think about none of them. The tax is large and recurring. The structure underneath it was set years ago by somebody solving a smaller problem. And the concentration risk is total, because the business is simultaneously the income, the asset, and the job.

A common pattern is a competent CPA filing accurate returns on a structure nobody has questioned since formation, alongside a wealth manager investing whatever survives. Both are doing their jobs. Neither is responsible for the design.

The decisions that matter here are made upstream of the return, in the year before the income arrives, and frequently several years before a transaction anyone is contemplating.

Recognition

The problems you already know about.

If several of these are familiar, the situation is well within what this practice was built for.

Taxed on income you never received

Pass-through income is taxed on allocation, not on distribution. In a growing or capital-hungry business the K-1 routinely exceeds the cash that actually reached you, and the difference comes out of your personal balance sheet.

A structure built for a company that no longer exists

The entity was chosen at formation, when the business was smaller, simpler, and in fewer states. It has not been revisited since, and the classification that was right then is frequently wrong now in ways that cost real money every year.

Owner compensation set by habit

The number was picked once and adjusted for inflation. It is a position that has to be defensible if examined, and nobody has documented the basis for it.

Operating risk and personal assets in the same place

The business generates the liability and also holds or is adjacent to the value. A claim against the operating company reaches further than most owners assume, and the separation that would have limited it needed to exist before the claim did.

A deduction you may not be able to use

Large first-year deductions are constrained by the excess business loss limitation, the at-risk rules, and material participation. A deduction that exceeds what the rules allow this year converts to a carryforward, which is worth considerably less than the year-one number you were shown.

An exit with no runway

Pre-transaction structuring generally needs to be in place well before a buyer is at the table, and several of the most valuable options require holding periods. Arriving six months before a sale forfeits most of them.

Less obvious

And the ones that rarely get named.

These surface in the diagnostic rather than in the first conversation, and they are usually the more consequential half.

Multi-state exposure that grew while you were not looking

Remote employees, customers, and inventory each create nexus. Most owners discover their state footprint during an examination rather than during planning, and the assessments are retrospective.

Your buy-sell may not survive contact with reality

Many are unfunded, valued on a formula nobody has revisited, or silent on the events most likely to occur. It is the document that decides what happens to your family, and it is usually the least examined one you have signed.

The business is your concentration risk

It is the income, the pension, the asset, and the occupation. Every other position you hold is a rounding error next to it, and diversifying away from it is a structural decision rather than an investment one.

How we work here

The sequence, applied to business owners.

The same three stages, in the same order, framed against the situation you are actually in.

01
Save
Entity design, owner compensation, and distribution timing set deliberately, with asset and credit positions sized against what the loss limitation rules will actually allow you to use.
Save in detail
02
Protect
Operating exposure separated from held assets, so a claim against the business is not reaching straight through to what the business paid for.
Protect in detail
03
Grow
Distributions, partial sales, and an eventual exit planned for tax before they happen, so taking capital out of the business is a scheduled decision rather than a surprise on the return.
Grow in detail

Common triggers

When people tend to call.

Pass-through income taxed at the top rate with distributions that do not match the K-1
An entity structure inherited from formation that no longer fits the business
Owner compensation set by habit rather than designed
Operating liability and personal assets sitting closer together than you think
A large deduction you were shown that the loss limitation rules may not let you use
A sale or succession somewhere on the horizon and no pre-transaction work started
Multi-state exposure that grew as the business grew, and was never addressed

Written for this situation.

All insights

Loss Limitations

The Limit Nobody Models

A large first-year deduction is worth very different amounts to two taxpayers with the same income this year and different income next year. The provision that decides it moved against taxpayers in 2026, and almost nobody has noticed.

9 min

Multi-State

Three States That Will Not Follow

California, Illinois, and New Jersey each break the central federal planning move, and they break it in three different ways. Only one of the three is a timing problem.

10 min

Credit Stacking

The Stack, and the Question Beneath It

Historic credits, state historic credits, New Markets allocation, and tax increment financing can combine into an unusually favorable capital stack. They can also make a bad project look financeable.

9 min