Recently Inherited Business (Within 30 Days): Urgent Tax Actions

If you've just inherited the business, act quickly—many valuable elections expire or require timely filings. A CPA can help you identify immediate deadlines and preserve basis step-up documentation.

The Section 754 election has a filing deadline. If the business is a partnership or multi-member LLC, a Section 754 election to step up the inside basis of partnership assets must be filed with the partnership's tax return for the year of death. Missing this election means you lose the ability to align asset basis with the fair market value you inherited. Acting now preserves that option.

Fiscal year and accounting method elections matter. The estate itself may need to choose a fiscal year, and certain entity-level elections must be made on the first return filed after the ownership change.

Coordinate with the estate executor. The Form 706 estate tax return (if required) and the decedent's final individual return interact with business tax filings. Your CPA and the estate attorney need to communicate immediately to avoid conflicting positions.

The pitfall: Waiting even a few weeks to engage a CPA can mean missing elections that cannot be made retroactively. The cost of delay is permanent and often substantial.