Tax Strategies for Limited Partner Investors in Private Investment Funds
Course Details
- smart_display Format
On-Demand
- signal_cellular_alt Difficulty Level
Intermediate
- work Practice Area
Tax Law
- event Date
Thursday, November 14, 2024
- schedule Time
1:00 p.m. ET./10:00 a.m. PT
- timer Program Length
90 minutes
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This 90-minute webinar is eligible in most states for 1.5 CLE credits.
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BARBRI is a NASBA CPE sponsor and this 110-minute webinar is accredited for 2.0 CPE credits.
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BARBRI is an IRS-approved continuing education provider offering certified courses for Enrolled Agents (EA) and Tax Return Preparers (RTRP).
This CLE/CPE webinar will provide tax counsel and advisers with a detailed guide to the tax issues of various types of private investment funds, including private equity, venture capital, and real estate funds. The panel will discuss the tax implications of various fund structures, identify potential tax filing and payment obligations, and identify possible strategies for negotiating key fund provisions in both the fund agreement and in side letters.
Mr. Foreman co-chairs FRB’s Taxation Practice Group and advises businesses on the tax effects of a variety of corporate transactions, including taxable and tax-free reorganizations, mergers, sales, and acquisitions. He designs and implements tax-efficient structures for U.S.-based businesses to expand abroad and invest in foreign joint ventures. Mr. Foreman drafts tax memoranda and opinions on a variety of subjects, including tax-free reorganizations, tax-efficient return of capital to owners, Qualified Small Business stock, and various state pass-through entity taxes. He defends clients from audits from the IRS and various state tax agencies, including appealing audit determinations. Mr. Foreman advises clients on a variety of tax issues related to cryptocurrencies, including initial coin offerings (ICOs), taxability of staking and air drops, and the imposition of Sales and Use taxes on the issuance of non-fungible tokens (NFTs). He drafts tax portions of Operating and Shareholder Agreements for businesses in different industries. Mr. Foreman has extensive experience in a variety of SALT issues, especially New York State residency audits and state Sales and Use tax nexus issues post-Wayfair.
Mr. Williams is Senior Counsel with FRB’s Corporate & Securities Practice Group, and with the Cannabis Practice Group. He has over 10 years of experience specializing as a corporate and securities lawyer and acting as outside counsel and a trusted adviser to public and private companies, individuals, and investment funds. Mr. Williams regularly counsels private companies and individuals on a variety of legal issues. He also has extensive experience representing publicly-traded companies with respect to their ongoing disclosure requirements under the Securities and Exchange Act of 1934 and compliance with the Securities Act of 1933.
The popularity of private investment fund limited partnerships among high net worth investors creates both opportunities and challenges for tax advisers and counsel. The complexity of the funds requires that investors be made aware of the potential tax traps, in the form of filing and payment obligations, as well as the opportunities to minimize the tax impact of the investments through structuring and front-end planning.
The panel will discuss several major classes of private investment funds, focusing on venture capital, mezzanine debt, real estate funds, and "fund of fund" partnerships. Common elements of each of these funds are that they all make private (as opposed to public) company investments; however, each of the funds has individual tax characteristics, and counsel can assist in evaluating and minimizing the impact of these tax wrinkles.
Counsel may often be able to mitigate negative tax results by negotiating modifications, either in the agreement or through "side letters." Advisers must have a comprehensive knowledge of what traps to avoid as part of any separate negotiations, as well as in the overall tax planning for these investment vehicles.
Listen as our experienced panel provides a detailed guide to the tax implications of investing in private investment fund limited partnerships from the investors' side of the transaction.
- Structures and tax characteristics of private investment funds
- Venture capital
- Fund of funds
- Real estate
- Mezzanine debt
- Tax implications of investment strategies
- Carried interest considerations
- Tax distribution provisions
- Side letters and other negotiation strategies
The panel will review these and other important issues:
- What are the structuring options and accompanying tax issues for taxpayers investing in private investment funds?
- How to identify "traps for the unwary" in terms of potential tax filing and payment obligations, both in the U.S. or foreign jurisdictions, and possible protective strategies
- How to design strategies for negotiating key tax provisions, whether in the fund agreement or in side letters
- How to identify and understand liability under subscription letters
- Updates on key changes in fund structure and tax treatment, including management fee waivers and carried interest
Learning Objectives
After completing this course you will:
- Understand the tax treatment for various types of private investment funds
- Identify the tax implications of fund structures and how different structuring options may meet the client's specific needs as an investor
- Recognize the potential "traps for the unwary" in the various structures
- Ascertain strategies for negotiating key tax provisions in both fund agreements and through side letters
- Field of Study: Taxes
- Level of Knowledge: Intermediate
- Advance Preparation: None
- Teaching Method: Seminar/Lecture
- Delivery Method: Group-Internet (via computer)
- Attendance Monitoring Method: Attendance is monitored electronically via a participant's PIN and through a series of attendance verification prompts displayed throughout the program
- Prerequisite: Three years+ business or public firm experience at mid-level within the organization, preparing complex partnership agreements and income tax forms and schedules for partnerships and pass-throughs; supervisory authority over other attorneys or accountants. Knowledge and understanding of private equity fund partnership structures, carried interest compensation, and profits interest. Familiarity with management fee waiver structures, economic risk rules and audit processes.
Strafford Publications, Inc. is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of Accountancy have final authority on the acceptance of individual courses for CPE Credits. Complaints regarding registered sponsons may be submitted to NASBA through its website: www.nasbaregistry.org.
Strafford is an IRS-approved continuing education provider offering certified courses for Enrolled Agents (EA) and Tax Return Preparers (RTRP).
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