Category: Funds

New Three-Year Holding Period for Capital Gains Treatment of Carried Interest

Effective immediately, there is a new requirement that each particular portfolio company interest which is the subject of a disposition event needs to have been held by the fund for more than 3 years in order for the allocable carried interest income at the general partner level to be taxed […]

Changes to Handling of Underpayment of Taxes by VC Funds, and to the Concept of the “Tax Matters Partner”

Certain important changes took effect on January 1, 2018 regarding underpayment of taxes by partnerships as well as the handling of tax inquiries including audits. The biggest change is that the IRS can now come to collect tax underpayments (and associated penalties and interest) from the fund, whereas previously they […]

New 10% Withholding Imposed on Buyers of US Partnership Interests From Foreign Sellers

Be aware that part of the new tax law that came into effect January 1, 2018 imposes upon buyers of interests in U.S. entities taxed as partnerships (whether partnerships, LLCs, etc.) a new withholding requirement, under which the buyer of a partnership interest must withhold a 10% tax on the […]