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

Navigating Footnotes and Tying Information to the Tax Return

Note: CLE credit is not offered on this program

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

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Conducted on Wednesday, January 24, 2024

Recorded event now available

or call 1-800-926-7926

This course 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, the K-1 often requires the tax preparer to refer to information from numerous footnotes for hedge funds and other multi-fund pass-through entities. 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. Tax professionals must identify the type of fund the K-1 is generated from and use the 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 of hedge funds
  2. Overview of the 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. Tax capital reporting requirements
  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. Discussion of changes in K-1 reporting requirements

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 reflect the income, losses, and deductions to report accurately
  • 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 critical pieces of information
  • Prepare a schedule to reconcile current-year hedge fund K-1 reporting information to the investors' monthly statements

Faculty

Plourde, Andrew
Andrew L. Plourde
Tax Partner
KPMG

Mr. Plourde specializes in tax compliance and consulting for hedge funds and investment partnerships.  He is a...  |  Read More

Rausch, Alyssa
Alyssa Rausch
Senior Manager
Eisner Advisory Group

Ms. Rausch is a Senior Tax Manager in the Private Client Services Group with more than 15 years of experience in...  |  Read More

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