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FATCA, Sure! But Cheaters will be Cheaters

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September 11, 2014
FATCA, Sure! But Cheaters will be Cheaters

I have expressed my views about FATCA before. My belief is that while it is a well-intentioned law standing on a higher moral ground, its added complexity and international fallout overshadow its utility. In other words, I personally think that its benefits outweigh the burdens. There was a very thoughtful letter not long ago...
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ILM 201436049: An Unknown Hedge Fund Gets a Self-Employment Tax Slap from the IRS

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September 8, 2014
ILM 201436049: An Unknown Hedge Fund Gets a Self-Employment Tax Slap from the IRS

Apparently some investment funds continue to take the position that their 2% service fee income is exempt from the self-employment tax (“SET”) under the “limited partner” exception of Sec. 1402(a)(13). These positions are often based on advice by counsel that there is a material distinction among an LLC, LP and LLP when it comes...
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Net Investment Income Tax and US Territories – Take Two

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August 13, 2014
Net Investment Income Tax and US Territories – Take Two

Not long ago I pointed out here that apparently there is significant confusion regarding the applicability of the NIIT to residents of the U.S. Virgin Islands and Puerto Rico. There I discussed that there is conflicting information coming from BIR and Treasury and that LPs ought to talk to their CPAs right away. Apparently,...
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Is a Failure to File an FBAR Covered under the Tax Indemnity in a Stock Purchase Agreement?

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July 11, 2014
Is a Failure to File an FBAR Covered under the Tax Indemnity in a Stock Purchase Agreement?

My job as a lawyer is to worry about the client’s finances and think of various scenarios that could cost my clients. One worry that has occupied my mind in the past has to do with FBARs and Stock Purchase Agreements. Imagine you are a private equity fund and you purchase a later stage private...
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W-8BEN-E Instructions are Released – Tax Policy Meets Reality

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June 26, 2014
W-8BEN-E Instructions are Released – Tax Policy Meets Reality

In my last post regarding W-8BEN-E, I observed that some foreign businesses were in a predicament because withholding agents started asking for the form but there were no instructions. I asked ”for how long” will this continue and the IRS answered – until June 24th.  Aside any jokes that the IRS is actually taking queue from...
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