Welcome to Private Equity, Venture Capital and Hedge Fund Taxation

You can change this text in the options panel in the admin

The place to share your thoughts about fund taxation!

Member Login
Lost your password?
Not a member yet? Sign Up!

Partnership Interest in A Scratch-and-Dent Distressed Debt Master Fund Qualifies as a “registered form obligation”

By
0
January 26, 2015
dreamstime_17004674

PLR 201504004 is a bit of an esoteric ruling. It deals with the narrow issue of the availability of the Reg. 1.871-14(a) portfolio interest exemption to funds that invest in distressed securities that are not in registered form. As a background, the portfolio interest exemption provides that the receipt of interest is not subject to...
Read More »

CCA 20145102F: Three Years after CCA 201104031 Taxpayers Apparently Persist on Claiming Open Transaction on the “Short Sale” Unwind of a Variable Prepaid Forward

By
0
January 14, 2015
1024px-NASDAQ_stock_market_display

About 3 years ago we described a ruling, CCA 201104031, disagreeing with a strategy implemented by some taxpayers in closing variable prepaid forwards (VPFs). The strategy was based on a reading of PLR 200440005 and involved the borrowing of open market shares and delivering those shares at the VPF close (instead of delivering the originally pledged...
Read More »

CCA 201501013 – An Inbound Fund Runs into a U.S. Lending Trade or Business Mishap of Enormous Proportions

By
0
January 6, 2015
IRS

U.S. lending trade or business is one of those issues that haunt U.S. investment fund tax advisers like the boogie man. If you get it wrong, a lot of things go bad. To outline the issue succinctly, inbound investment funds with foreign investors are generally not subject to tax on interest income and capital...
Read More »

Fund Principals – Here is What not to Do in Your Private Foundations

By
0
November 24, 2014
dreamstime_17264607

It is common for high profile private equity or hedge fund principals to run private foundations or other charitable organizations. The principals would be “disqualified persons” but the foundations would nonetheless have some room for investing in the underlying investment funds sponsored by the principals without triggering UBTI and excise taxes. The charitable organization sponsored by...
Read More »

In Brinkley v. Comm’r, T.C. Memo. 2014-227, all Goes Wrong for the Taxpayer

By
0
November 3, 2014
600px-US-TaxCourt-Shield-BW_svg

Here is a case that showcases how a routine business transaction could lead to tax grief for the parties involved. In this case we have a founder, CIO exec, who worked for a company called Zavers. The CIO was paid a salary, a bonus, and also received restricted shares, much like many founders and...
Read More »


Miscellaneous