Hedge Funds: Tax Advantages and Liabilities for Investors and Fund Managers

Leveraging Qualified Dividend Income, Net Investment Tax, Management Fee Waivers, and More

Recording of a 110-minute premium CLE/CPE webinar with Q&A

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Conducted on Thursday, December 5, 2013

Recorded event now available

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Course Materials

This CLE course will educate tax counsel on tax issues specific to hedge funds for taxpayers and managers. Our panel will discuss tax treatment of qualified dividend income, management fee waivers and deferral, as well as tax liabilities including the new Net Investment Income Tax.


The American Taxpayer Relief Act of 2012 made the favorable tax treatment of qualified dividend income (QDI) permanent. However, high-income taxpayers pay a higher rate starting in 2013. Tax counsel must understand QDI as it applies to non-U.S. investments, holding period requirements, and investment shifting.

Proposed regulations effective for tax years beginning after Dec. 31, 2013, may further impact taxation of hedge funds. The proposed regs clarify the types of income subject to the Net Investment Income Tax, including dividend income and certain properly allocable deductions.

Management fee waivers allow hedge fund managers to forgo their fixed management fee (commonly 2%) in exchange for a profits interest, a carried interest, to take advantage of deferral, and preferential capital gains tax rates. Hedge fund managers may elect to receive their fee in non-U.S. investments.

Listen as our distinguished panel reviews the favorable treatment of QDI along with treatment for high-income taxpayers.  The panel will discuss the current Net Investment Income Tax and the effect of the proposed regulations. Attendees will also be equipped with an understanding of the tax advantages of management fee waivers.



  1. Qualified dividend income after ATRA
    1. Tax treatment
    2. Non-U.S. investments
    3. Holding period requirements
    4. Investment shifting
  2. Net Investment Income Tax
    1. Current structure
    2. Proposed regulations
  3. Management fee waivers


The panel will review these and other key questions:

  • What is the tax treatment of qualified dividend income received from hedge funds?
  • How does the Net Investment Income Tax apply?
  • How will the IRS proposed regulations affect the applicability of the Net Investment Income Tax?
  • How do fund managers benefit from fee waivers?

Following the speaker presentations, you'll have an opportunity to get answers to your specific questions during the interactive Q&A.


Peter Elias
Peter Elias

Jones Day

Mr. Elias’ practice focuses on the structuring and implementation of tax-advantaged structures for business and...  |  Read More

Michelle M. Jewett
Michelle M. Jewett

Morrison Foerster

Ms. Jewett has substantial experience in a broad range of tax matters, including corporate, mergers and acquisitions,...  |  Read More

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