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Tax Issues for Secondary Sales of Private Funds: Transfer Restrictions, Fund Structures, Tax Elections, Allocations

Recording of a 90-minute premium CLE/CPE video webinar with Q&A

This program is included with the Strafford CLE Pass. Click for more information.
This program is included with the Strafford CPE+ Pass. Click for more information.
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Conducted on Thursday, August 12, 2021

Recorded event now available

or call 1-800-926-7926

This CLE/CPE course will provide guidance to tax counsel and advisers on critical tax considerations for secondary sales of interests in private funds. The panel will discuss tax and fund structuring challenges impacting the buyers, sellers and the fund, transfer restrictions, tax elections, allocation of tax and expenses, and tax withholdings. The panel will also offer fund structuring techniques to minimize potential implications in the event of a sale.


In response to the coronavirus pandemic, decreased values of certain assets, and other items impacting investments, fund investors may seek options to liquidate their interests. Tax counsel and advisers must identify essential tax rules applicable to secondary sales of interests in private funds and implement methods to avoid or minimize any adverse tax consequences for sellers and buyers.

The secondary private equity market involves the buying and selling of preexisting interests in private market funds. Investors purchase these interests from limited partners seeking to exit primary private equity funds before they are fully liquidated. However, this process isn't without potential legal and tax ramifications. Secondary sales require counsel and advisers to have a complete understanding of tax and structuring considerations, such as the impact of transfer restrictions, tax elections, and allocation of taxes and expenses, all of which significantly impact the transaction.

Listen as our panel discusses tax and fund structuring challenges impacting a buyer, seller, and private equity funds stemming from secondary sales and offers techniques for structuring transactions to minimize potential tax implications.



  1. Options for investors in liquidating fund interests
  2. Sale of fund interests to the secondary market
  3. Key tax considerations
  4. Best practices to avoid unintended tax consequences


The panel will review these and other key issues:

  • What options are available to investors in liquidating fund interests?
  • What are the key tax considerations for investors selling their interests in private funds on the secondary market?
  • What are the common transfer restrictions and resulting tax scenarios to examine?
  • How do the fund structure and tax elections impact the sale of an investor's interests in a private fund?
  • How can you avoid adverse tax consequences of a sale to a non-U.S. investor or tax-exempt investor?
  • What issues arise with the allocation of taxes and expenses between buyer and seller?
  • What are critical withholding tax issues to consider?


Kim, Sharon
Sharon Kim


Ms. Kim advises the firm's leading financial institution and investment fund clients and investors on the U.S. tax...  |  Read More

McDonald, Matthew
Matthew A. McDonald

Mayer Brown

Mr. McDonald is a partner in the Tax Transactions practice of Mayer Brown's Chicago office. As a member of the...  |  Read More

Pae, JoonBeom
JoonBeom Pae

Mayer Brown

Mr. Pae's practice focuses on the tax aspects of the formation, financing and investment activities of domestic and...  |  Read More

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Strafford will process CLE credit for one person on each recording. CPE credit is not available on recordings. All formats include course handouts.

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