Tax Strategies for Limited Partner Investors in Private Investment Funds

Avoiding Tax Traps Through Side Letters and Other "Hidden" Agreements

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


Conducted on Wednesday, April 13, 2016

Recorded event now available

or call 1-800-926-7926
Program Materials

This CLE/CPE webinar will provide tax counsel and advisers with a detailed guide to the tax issues of various types of private investments funds, including private equity, venture capital, and real estate funds. The panel will discuss the tax implications of various fund structures, identify potential tax filing and payment obligations, and identify possible strategies for negotiating key fund provisions in both the fund agreement and in side letters.

Description

The popularity of private investment fund limited partnerships among high net worth investors creates both opportunities and challenges for tax advisers and counsel. The complexity of the funds requires that investors be made aware of the potential tax traps, in the form of filing and payment obligations, as well as the opportunities to minimize the tax impact of the investments through structuring and front-end planning.

The panel will discuss several major classes of private investment funds, focusing on venture capital, LBO funds, mezzanine debt, real estate funds, and “fund of fund” partnerships. Common elements of each of these funds is that they all make private (as opposed to public) company investments; however, each of the funds has individual tax characteristics, and counsel can assist in evaluating and minimizing the impact of these tax wrinkles.

Counsel may often be able to mitigate negative tax results by negotiating modifications, either in the agreement or through “side letters”. Advisers must have a comprehensive knowledge of what traps to avoid as part of any separate negotiations, as well as in the overall tax planning for these investment vehicles.

Listen as our experienced panel provides a detailed guide to the tax implications of investing in private investment fund limited partnerships from the investors’ side of the transaction.

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Outline

  1. Structures and tax characteristics of private investment funds
    1. Venture capital
    2. Fund of funds
    3. Real estate
    4. Mezzanine debt
    5. Leveraged buyout funds
  2. Tax implications of investment strategies
  3. Carried interest considerations
  4. Tax distribution provisions
  5. Side letters and other negotiation strategies

Benefits

The panel will review these and other important issues:

  • What are the structuring options and accompanying tax issues for taxpayers investing in private investment funds?
  • How to identify “traps for the unwary” in terms of potential tax filing and payment obligations, both in the U.S. or foreign jurisdictions, and possible protective strategies
  • How to design strategies for negotiating key tax provisions, whether in the fund agreement or in side letters
  • How to identify and understand liability under subscription letters
  • Updates on key changes in fund structure and tax treatment, including management fee waivers and carried interest

Faculty

Kathleen (Kat) Saunders Gregor
Kathleen (Kat) Saunders Gregor

Partner
Ropes & Gray

Ms. Gregor focuses on partnership and international tax issues, particularly with respect to disputes with the IRS...  |  Read More

Norman, Elizabeth
Elizabeth M. Norman

Partner
Nutter McClennen & Fish

Structuring of complex acquisitions and dispositions of domestic and international holdings, including public and...  |  Read More

Cara Howe Santoro
Cara Howe Santoro

Nutter McClennen & Fish

Ms. Santoro focuses her practice on advising businesses, nonprofit organizations, and individuals on a variety of...  |  Read More

Other Formats
— Anytime, Anywhere

Strafford will process CLE credit for one person on each recording. All formats include program handouts. To find out which recorded format will provide the best CLE option, select your state:

CLE On-Demand Video

$297

Download

CPE Not Available

$297