[Date]
[New partner name]
[New partner address]

Re: [Partnership name]

Dear [New partner name]:

[For death of partner]: We have been informed that your [relationship, name] passed away in [year]. Please accept our condolences for your loss.

[For new partner who purchased an interest]: We have been informed that you recently purchased an interest in [Partnership name].

The purpose of this letter is to inform you of a unique attribute of partnership tax law that may be of substantial benefit to you. The partnership has made, or will make, a “Section 754 election” that allows adjustments to your partnership basis. Making that adjustment could result in additional annual depreciation deductions for you of approximately [$ estimated amount]. This additional depreciation could have a significant beneficial impact on your personal income tax liability, both currently and for years into the future.

For this reason, the general partner has allowed the partners to utilize this benefit but requests that they pay for the additional costs. Our fee for this work is a one-time charge of $___. Our services include the computation of the basis adjustment and the calculation of the additional depreciation in the current year and each succeeding year.

We would be pleased to discuss this letter at any time. If you wish us to proceed with the foregoing, please sign the letter in the space provided and return it to us. Also, please enter the information we’ve requested.

_________________________                                ____________________

Signature                                                                                 Date:

Please provide the following information:

Name of legal owner of partnership interest                         _________________________

Federal ID# or Social Security number                                   _________________________

Valuation of partnership interest for estate purposes          _________________________