Recently Issued Proposed Carried Interest Regulations – Are you prepared?
WhenNovember 18, 2020
On July 31, the IRS released proposed Treasury Regulations (the “Proposed Regulations”) interpreting the three-year holding period for long-term capital gains applicable to investment managers under Section 1061 of the Internal Revenue Code (“Section 1061”). On November 18, SS&C, Anchin, Seward and Kissel LLP, and the Law Offices of Thomas D. Sykes PLLC teamed up to provide a background on the 1061 regulations, some of the open issues, and investment managers’ possible responses.
We discussed how the proposed regulations address:
- Special Allocation Provisions and the Impact on Carry Waivers
- Use of S Corporations as a “Corporation” under Section 1061’s “Corporation Exception”
- Contributed/Reinvested Capital
- Capital Interest Exception and Pre-2018 Unrealized Gains
- Once an API, always an API
- E. George Teixeira, CPA, MS - Tax Leader of Anchin’s Financial Services Practice and Private Equity Group, Anchin
- Tom Sykes, Managing Member, Law Offices of Thomas D. Sykes PLLC
- Brett Cotler, Tax Attorney, Seward and Kissel LLP
- David Helprin, Managing Director – Tax Services, SS&C Technologies, Inc