Tax Reporting and Reconciliation of Hedge Fund and Other Alternative Investment Fund K-1s

Navigating Footnotes and Tying Information to the Tax Return

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


Conducted on Wednesday, May 16, 2018

Recorded event now available

or call 1-800-926-7926
Program Materials

This webinar will provide tax advisers and professionals with the tools needed to accurately reconcile complex Form K-1 for hedge funds and other alternative investments.

Description

For many K-1s received by taxpayers, reporting the pass-through items of income and loss is a fairly straightforward process. However, for hedge funds and other multi-fund pass-through entities, the K-1 often requires the tax preparer to refer to information from numerous footnotes. A Schedule K-1 from an alternative investment fund can easily exceed 50 pages or more, including details for individual transactions among the various funds or investments held.

These K-1s generally have important tax reporting information in the extensive footnotes following the standard page 1 boxes listing income, deductions, credits and distributions. To allocate and report items on the client’s tax return, tax professionals must be able to identify the type of fund the K-1 is generated from and use information found in the footnotes to prepare an accurate and complete return for clients.

Listen as our experienced panel provides detailed and practical guidance to help tax professionals correctly reconcile tax information from these complex K-1 schedules.

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Outline

  1. Brief background and history of hedge funds
  2. Overview of investor, trader and fund of funds
  3. Treatment of income and expenses from hedge fund K-1s
  4. Differences between book and tax income, Item L of Schedule K-1
  5. Net Investment Income Tax - 3.8%
  6. Reconciliation schedule to tie Fund of Fund K-1s to tax return
  7. Footnotes and how to decipher
  8. Go through sample K-1s for each type of fund
  9. General overview of the areas that would impact hedge fund K-1s from the Tax Cuts and Jobs Act signed on December 22, 2017

Benefits

The panel will review these and other relevant topics:

  • Understand the type of K-1 you are receiving (i.e. investor fund, trader fund, fund of funds)and how to properly reflect the income, losses, and deductions being reported.Identifying K-1 information that the tax preparer must enter on a return area other than Schedule E, page 2
  • How to decipher K-1 footnotes to ensure proper treatment of key pieces of information
  • Prepare a schedule to reconcile current-year hedge fund K-1 reporting information to what is reflected on the tax return.

Faculty

Lee, Suzy
Suzy Lee, CPA, MST

Senior Tax Manager
Untracht Early

Ms. Lee is experienced in tax advisory services for a varied array of financial services companies and executives...  |  Read More

Palmer, Stacy
Stacy L. Palmer, CPA, MBA, MST

Principal
Untracht Early

Ms. Palmer's areas of focus include both corporate and individual taxation. She offers guidance on effective tax...  |  Read More

Ross, Laura
Laura L. Ross, CPA

Partner
EisnerAmper

Ms. Ross is a Partner in the firm’s Financial Services Group. She has extensive expertise in accounting and tax...  |  Read More

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