Temporary Regs Shut Down Partner-Employee Planning
In the investment fund and private M&A world it is very common to issue profits interest to key-men. In the investment fund context these could be top traders for example who share in the GP’s carry. In the private M&A context these would be non-founding member executive talent. Often these individuals would be perceived by the founders and other parties as employees but would be remunerated like partners. In fact, many times, individuals who were previously purely treated as employees are converted to profit interest members. That usually presents a predicament from a tax...
May 04, 2016 read more
NEWT Act Reintroduced
For those who keep up with the net investment income tax (NIIT) and the S-corporation planning touted by many practitioners as a solution for minimizing both NIIT and employment tax, here is a fresh news to keep in mind. The Narrowing Exceptions for Withholding Taxes Act of 2013, or so called NEWT Act (purportedly named after former House Speaker Newt Gingrich) was reintroduced in the House this January 22 by Charles Rangel. This Bill is not new. It was also introduced in the 112th Congress and even prior to that with the American Jobs and Closing Tax Loopholes Act of 2010 (Sec. 413 of...
February 01, 2013 read more