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From Kirsten Bischoff, Opalesque New York: On Tuesday, hedge fund professionals met in New York for the third of four Opalesque Hedge Fund Workshops covering tax and legal issues. The morning’s discussions, which covered “Planning for Hedge Fund Managers and Investors” focused on different areas which hedge fund managers and their planning committees need to address when forming a hedge fund.

Determining Trader versus Investor Status The morning began with a two person debate between Lee Sheppard, Esq, Contributing Editor of Tax Notes and Robert N Gordon, President and Owner of Twenty-First Securities Corporation and Adjunct Professor at New York University’s Graduate School of Business.

An article by Gordon, published originally in the Journal of Wealth Management and available at the Twenty-First Securities website (Is Your Hedge Fund a Trader or an Investor?) poses the question at hand succinctly: “Highlighting a problem that most hedge fund investors will face even when their hedge funds employ tax friendly trading tools. Indeed, the answer to the apparently innocuous question of whether a hedge fund manager is classified as a trader or an investor could well be the burning issue for individuals investing in hedge funds. For most individuals, the wrong” answer can cause taxes to be paid on “phantom” profi......................

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