Equity Investments in Pass-Through Entities: Investment Structures, Tax Ramifications
Note: CPE credit is not offered on this program
Recording of a 90-minute premium CLE video webinar with Q&A
This CLE course will discuss the principle tax ramifications of equity investments in limited liability companies (LLCs) and limited partnerships (LPs) by private equity, venture capital, and angel investment funds.
Outline
- Advantages and disadvantages of LLCs and LPs as portfolio companies
- Basis step-up (cash flow benefits and exit value)
- Tax-free leveraged recaps
- Outside basis adjustments
- Qualified Business Income Deduction
- Pre-Tax IRR
- Comparison to corporations
- Corporate income tax rate
- Qualified Small Business Stock
- Special tax issues
- Considerations of tax-exempt and foreign investors
- Basis step-up
- 743(b) adjustments
- 704(c) basis step-up for growth equity investments
- Avoiding the anti-churning rules
- Profits interests
- Negotiating tax distributions
- Greater flexibility in establishing rights of minority equity holders
Benefits
The panel will review these and other noteworthy issues:
- Considering the pros and cons of investing in pass-through entities
- Choosing the appropriate investment structure
- Negotiating tax distributions for preferred equity investments
- Greater flexibility in establishing rights of minority equity holders
Faculty
Seth Lebowitz
Partner
Sadis & Goldberg
Mr. Lebowitz advises clients on the tax-efficient planning and execution of a broad range of transactions, with a... | Read More
Mr. Lebowitz advises clients on the tax-efficient planning and execution of a broad range of transactions, with a particular focus on the formation, operation and investing activities of private equity and hedge funds.
Close
Brigid Morrissey, CPA, MBA, MST
Senior Manager
CohnReznick
Ms. Morrissey serves private equity funds, primarily in the middle market. Throughout her career, she has worked with... | Read More
Ms. Morrissey serves private equity funds, primarily in the middle market. Throughout her career, she has worked with companies across multiple industry segments, including manufacturing and distribution, real estate, retail, and technology, many of which are held by private equity and venture capital sponsors. Ms. Morrissey has provided closely-held corporations, partnerships, and high-net-worth individuals a wide range of tax-related services, including tax planning and compliance, selection of and changes in accounting methods, tax credit advisory services, cost segregation studies, representation before IRS and other taxing authorities, and advisory services to businesses and their owners.
Close