Tue, Mar 19, 2024
A A A
Welcome Guest
Free Trial RSS pod
Get FREE trial access to our award winning publications
Alternative Market Briefing

Other Voices: What Biden's tax proposals mean for private funds

Wednesday, October 06, 2021

Authored by Sonia Kothari and Raj Tanden - Foley & Lardner LLP

On September 13, 2021, the House of Representative Ways and Means Committee introduced tax proposals that, if enacted, would make significant changes to the U.S. federal income tax system. This Alert summarizes some of the proposals that may be relevant to private investment funds.

Carried Interest

Section 10611 recharacterizes long-term capital gain allocated with respect to an applicable partnership interest (API) or recognized upon the disposition of an API as short-term capital gain unless the asset sold has a holding period of greater than three (3) years. An API is a partnership interest held in connection with the performance of services, and generally includes a profits interest or carried interest. Gain determined under Sections 1231 and 1256 qualified dividend income are not subject to recharacterization.

The proposed rule generally expands the scope of the Section 1061 recharacterization to all "net applicable partnership gain" with respect to an API unless an exception applies. "Net applicable partnership gain" is defined as the sum of: (i) net long-term capital gain determined by taking into account gains and losses with respect to one or more APIs, and (ii) other amounts which are includible in the taxpayer's gross income with respect to such APIs that are treated as capital gain or are subject to tax at the rate applicable to capital gain. This would i......................

To view our full article Click here

Previous Opalesque Exclusives                                  
Previous Other Voices                                               
Access Alternative Market Briefing

 



  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. KKR raises $6.4bn for the largest pan-Asia infrastructure fund[more]

    Laxman Pai, Opalesque Asia: The New York-based global investment firm KKR has raised a record $6.4bn for its second Asia-focused infrastructure fund, underlining investors' continued appetite for private markets. According to a media release from the alternative assets manager, the figure top

  2. Bucking the trend, top hedge fund makes plans for a second SPAC[more]

    From Institutional Investor: SPACs aren't dead. At least not to the folks at Cormorant Asset Management. The life sciences firm, whose hedge fund topped its peers in 2023, is confident it will match the success of its first blank-check company. Last week, the life sciences and biopharma speciali

  3. Benefit Street Partners closes fifth fund on $4.7 billion[more]

    Bailey McCann, Opalesque New York: Benefit Street Partners has closed its fifth flagship direct lending vehicle, BSP Debt Fund V, with $4.7 billion of investable capital across the strategy. Benefit Street invests primarily in privately originated, floating rate, senior secured loans. The fun

  4. 4 hedge fund themes that are working in 2024[more]

    From The Street: A poor earnings report from Tesla (TSLA) has not hurt the indexes on Thursday. The decline in Tesla stock, which is losing its position in the Magnificent Seven pantheon, is more than offset by strong earnings from IBM (IBM) and ServiceNow (NOW) . In addition, the much higher-t

  5. Opalesque Exclusive: A global macro fund eyes opportunities in bonds[more]

    Bailey McCann, Opalesque New York for New Managers: Munich-based ThirdYear Capital rebounded in 2023, following a tough year for global macro. The firm's flagship ART Global Macro strategy finished the year up 1