Tax Treatment of Carried Interest: Planning Opportunities for Tax, Private Equity and Real Estate Professionals

IRC Section 1061, Capital Contributions, Transfers to Unrelated Parties, Special Allocations, Section 1231 Property

An encore presentation featuring live Q&A

A 90-minute premium CLE/CPE webinar with interactive Q&A

Tuesday, November 26, 2019

1:00pm-2:30pm EST, 10:00am-11:30am PST

Early Registration Discount Deadline, Friday, November 1, 2019

or call 1-800-926-7926

This CLE/CPE webinar will provide guidance to tax counsel and advisers on the new tax law's impact on the treatment of carried interest and available planning opportunities. The panel will discuss the application of Sec. 1061, Sec. 1231 property, implications of related party transactions, and planning techniques to ensure favorable capital gains treatment.


IRC 1061 increases the holding period required for long-term capital gains treatment from more than one year to more than three years. The impact of the three-year holding period could be burdensome to hedge fund, private equity, and real estate professionals.

There is controversy over carried interest because the tax rules allow hedge fund, private equity, and real estate professionals to pay taxes on carried interest at the capital gains tax rate instead of the higher tax rate applicable to ordinary income. IRC 1061 increases the required long-term capital gains holding period for an "applicable partnership interest" to more than three years. Advisers must be able to identify interests subject to IRC 1061 for tax planning purposes.

Tax counsel and advisers must also understand partnership interests that fall within the definition of profits interest under Rev. Proc. 93-27 or any exceptions, whether or not the partnership interest was issued in connection with the performance of substantial services in an applicable trade or business, and what partnership interests are not subject to IRC 1061. Also, it is essential for advisers and counsel to recognize any available planning mechanisms for avoiding the three-year holding period requirements to prevent unintended tax liability.

Listen as our panel discusses the requirements of IRC 1061, determining applicable partnership interest subject to the new holding requirements, key planning issues for 1231 property, and tax planning techniques to maintain favorable tax treatment of carried interest.



  1. Overview of the requirements of obtaining capital gains treatment under IRC 1061
  2. Determining "applicable partnership interest" and "applicable trade or business"
  3. Applicability of IRC 1061 to 1231 property
  4. Planning ideas for avoiding IRC 1061 three-year holding period
  5. Best practices for compensation arrangements in light of new holding requirements under IRC 1061


The panel will review these and other noteworthy issues:

  • Treatment of carried interest and performance of services under IRC 1061
  • Available tax planning techniques and strategies for partnerships for more favorable tax treatment
  • Determining partnership interest that is "applicable partnership interest" subject to IRC Section 1061 holding requirements
  • Understanding key planning issues regarding the applicability of IRC 1061 to 1231 property
  • Potential planning opportunities presented by special allocations, transfers to unrelated parties, capital contributions and distributions
  • Best practices in ensuring favorable tax treatment in compensation arrangements involving carried interest

This is an encore presentation with live Q&A.


Lehn, David
David M. Lehn


Mr. Lehn is a partner in the private client and tax team. He has extensive experience in federal and state income,...  |  Read More

Levine, Richard
Richard S. LeVine

Special Counsel

Mr. LeVine's practice focuses on cross-border estate, gift and income tax planning for owners of privately held...  |  Read More

Lovett, Brian
Brian T. Lovett, CPA, JD


Mr. Lovett has extensive experience serving the tax needs of both public companies and closely-held businesses,...  |  Read More

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