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Financial Services

An Intelligent Investment

As regulatory scrutiny intensifies and risk becomes increasingly difficult to manage, financial services firms have larger challenges to face.  Anchin’s experts can provide the guidance needed to steer you down the right path. We advise our clients as they implement the latest investment strategies and utilize the most sophisticated financial vehicles providing the appropriate accounting and tax advice to meet their needs. Our services include ensuring full compliance in financial reporting, minimizing tax exposure, consulting on operations, regulatory registration, systems design, and technology solutions. It takes our team of experts who take the time to understand your firm’s tax and financial reporting needs to design strategic, growth oriented solutions.

Whether conditions are volatile or stable, bullish or bearish, nearly 300 hedge funds, mutual funds, broker/dealers and investment partnerships rely on Anchin. Whether they are looking for answers to questions concerning complicated issues, such as the structure of their fund offerings, allocation of realized and unrealized gains and losses, compensation of investment managers, tax treatment of contributed securities, or planning for the distribution of appreciated property and other withdrawals, Anchin is there to support them.

From small, entrepreneurial startups to established funds, Anchin provides high level, high touch service to financial services firms. We are the right sized firm for you – a mid-sized alternative to the Big 4, providing maximum value, senior level guidance and superior service.

To sign up for our Financial Services email list, click here.

Services include:

  • Investment funds
  • Brokers/Dealers
  • Mutual funds and other registered funds
  • Back office services and special procedures
  • International taxation
  • Analytical reporting
  • Private equity
  • Outsourced accounting services
  • Anchin, Block & Anchin (Cayman) Ltd.

“I have worked with Jeff since I launched my hedge fund, Cramer Partners, in 1987. Back then few people knew what a hedge fund was – his understanding and experience with the investment world makes him and his firm an excellent choice for anyone considering starting a fund or mulling a change. Over these past 30 years, Jeff’s advice has been invaluable to me and my business ventures, the growth of my fund and the prosperity and peace of mind of my clients.”

-James J. Cramer, American television personality, former hedge fund manager, and best-selling author. Cramer is the host of CNBC's Mad Money and a co-founder of TheStreet.

Private equity firms of all sizes have continued to show a growing interest in middle market companies. An effective strategy in dealing with complex activities involved in the Mergers and Acquisitions (M&A) process is essential. With over 90 years of experience serving middle market companies, Anchin specializes in responding to the individual needs of private equity firms and portfolio companies. We know where the issues are and the importance of having a dedicated team by your side every step of the way. Our single-office firm allows for efficient access to all of our resources, enabling us to deliver consistently superior work to our clients in a timely manner. Our team of experienced professionals provides in-depth industry knowledge while recognizing that each transaction is unique.

The members of Anchin’s Private Equity Industry Group understand the complications involved in transitioning a newly acquired company to a professionally managed organization. Understanding your investment strategy and knowing your company and team members is one of our specialties. Our team has the pertinent skills and expertise to help you succeed.

Anchin’s Private Equity Industry Group’s expertise extends to many industries, including:

  • Food and beverage
  • Fashion
  • Technology
  • Public relations and advertising
  • Construction, architecture and engineering
  • Services, transportation and logistics
  • Consumer products
  • Manufacturing and distribution
  • Real estate
  • Financial services

Does your company qualify for Research and Development (R&D) tax credits? The financial services industry is an essential component of the U.S. economy, providing liquidity to companies and individuals, responsible for safeguarding and investing assets, and providing insurance allowing businesses to take on additional opportunities in the marketplace. Innovation has long been considered a cornerstone of growth for the industry, leading to new products and processes including new trading applications, new online and mobile banking functionality and automation of previously manual processes. In addition, most companies in the industry have begun to place a greater emphasis cyber security, given the rise in detected incidents.

Anchin’s professionals understand the important role the financial services industry plays in keeping the U.S. competitive in an increasingly global economy. Our industry experience, attention to detail and expert judgment result in accurate, highly defendable tax credit calculations. Our dedicated team includes audit, tax and advisory professionals with years of experience identifying issues and solving problems for every type of business within the financial service industry’s subsectors, including:

  • Banking and capital markets
  • Asset management
  • Insurance

Our financial services industry R&D team ensures that our clients benefit from all of the incentives available to them. Anchin helps clients assess their R&D tax credits at all phases of their business, from the time they first consider a new product, service or functionality (white space evaluation) and throughout the entire software lifecycle. We are particularly skilled and experienced at identifying qualifying projects and initiatives in each area of your business and are experts at examining and capturing all allowable expenses towards your company’s research credit.

Anchin works with clients interested in claiming the R&D tax credit for the first time and those who have difficulty meeting the contemporaneous documentation requirements needed to support their R&D claim. We also assist clients who have had a significant portion of their R&D claim disallowed, and those who need to reassess their R&D tax credit calculation because the nature of their business has changed.

To learn more about Federal and State Research and Development tax credits.

In compliance with the requirements of the Cayman Islands Monetary Authority (CIMA), Anchin established an affiliate in the Cayman Islands, Anchin, Block & Anchin (Cayman) Ltd., to provide audit services to funds registered in the Cayman Islands.

The launch of the affiliate recognizes the fact that the Cayman Islands have developed in recent years into one of the most popular jurisdictions for offshore funds. Anchin´s New York office works closely with our affiliate to ensure that the same quality service is provided to those clients requiring an offshore auditor.

Anchin Cayman has been approved as an auditor by CIMA, the Cayman Islands Monetary Authority, the financial regulatory agency of the Cayman Islands.

With the depth and breadth of services provided by Anchin´s Financial Services Practice, it is clear why Anchin has emerged as a leader in providing auditing, accounting and tax services to the financial services community. The practice currently serves more than 400 investment funds, funds-of-funds, mutual funds, broker/dealers and investment advisers.

  • More than 35 years of experience supporting the Financial Services community
  • Innovative approaches to complex issues
  • Customized client service
  • Efficient and cost-effective audits
  • Design and implementation of optimal tax positions
  • Valuable advisory assistance to management
  • Timely delivery and accessibility to partners
  • State-of-the-art software packages
  • Proprietary tax Schedule K-1
  • Third party administration
  • International expertise and reach

Success Stories

  • Testimonial: Jim Cramer

    "Over these past 30 years, Jeff’s advice has been invaluable to me and my business ventures, the growth of my fund and the prosperity and peace of mind of my clients.”

  • R&D Tax Credits Case Studies: Financial Services

    The following are two case studies which further illustrate the types of projects and activities that will potentially qualify for the R&D tax credit. The…

News

  • Considering the Benefits of ESG Investing for Both Your Financial Plan and Worthy CausesSeptember 25, 2020

    Environment, Social and Governance (ESG) investing is a way to evaluate how a company’s practices in these areas may impact its stock return potential.

  • The NY Shield Act: It’s Time to Take Things SeriouslySeptember 16, 2020

    Effective as of March 21, 2020, New York enacted one of the most aggressive state data breach notification laws in the United States, the “Stop Hacks and Improve Electronic Data Security" (SHIELD) Act. This law applies to any person or business (even those operating outside of New York) that collects and maintains New York residents’ “private information.”

  • Ins and Outs of Tax-Loss HarvestingSeptember 14, 2020

    Tax-loss harvesting isn’t new, but robo-advisors have brought more awareness of the concept in recent years. New portfolio management tools are also helping automate the process further, making it easier for advisors to exercise ever-more-sophisticated strategies.

  • What the SEC’s Amendments to the Definition of “Accredited Investor” Mean for YouSeptember 10, 2020

    The amendments will now allow individuals possessing a measure of sophistication based on their professional knowledge and expertise, or certifications to qualify. The amendments also expand the list of entities that qualify as accredited investors by allowing any entity that meets an investments test to qualify. The amendments will become effective 60 days after the SEC’s rule release is published in the Federal Register.

  • Social Security Tax Deferral Raises Questions and ConcernsSeptember 8, 2020

    In our previous communication, we wrote about President Trump’s executive order allowing a deferral of the employee’s portion of FICA or social security tax (6.2% of wages). The Treasury just released Notice 2020-65 providing some additional guidance on the topic. Unfortunately, many questions remain unanswered.

  • OCIE Risk Alert: How to Avoid Regulatory Backlash During Prolonged Periods of Remote WorkAugust 27, 2020

    In its most recent Risk Alert, the U.S. Securities and Exchange Commission (SEC) Office of Compliance Inspections and Examinations (OCIE) provided guidance on best practices during the prolonged periods of remote work that many firms are experiencing during the COVID-19 pandemic.

  • How the New Interim Final Rule May Impact Your PPP Loan ForgivenessAugust 26, 2020

    This week, the SBA issued a new Interim Final Rule (IFR) on the Treatment of Owners and Certain Nonpayroll Costs that greatly impacts many PPP borrowers.

  • What do the Proposed Carried Interest Regulations Mean for You? August 20, 2020

    On July 31, 2020, the Internal Revenue Service (IRS) released proposed regulations (the Proposed Regulations) relating to the scope and applicability of Internal Revenue Code Section 1061. This alert will provide an overview of the Proposed Regulations and how they may affect hedge, private equity and other investment funds.

  • The Delaware Supreme Court’s Clarification of Limited Partner Rights to Books and Records, and What It Means for YouAugust 12, 2020

    In a recent ruling on the case of Murfey v. WHC Ventures, LLC, the Delaware Supreme Court concluded that a limited partner seeking the books and records of a Delaware limited partnership is not required to show that the materials requested are “necessary and essential” unless those terms are expressly stated in the limited partnership agreement. 

  • How COVID-19 Impacts Alternative Fund OperationsAugust 10, 2020

    COVID-19 has disrupted the alternative assets industry just as it has the rest of the world. Between high market volatility, spooked investors, travel restrictions and rapidly changing government regulation, it certainly is an unusual time to live and to operate in. How have fund managers changed their operations to respond? Preqin recently surveyed alternative fund managers to see what they are doing differently during the COVID-19 pandemic. The survey included hedge funds, private equity funds, venture capital funds, private debt and real estate investors from around the world.  Here are some key results.

  • How the Most Recent FAQs on PPP Loan Forgiveness May Impact YouAugust 10, 2020

    On August 4, 2020, the Small Business Administration (the “SBA”), in consultation with the U.S. Department of the Treasury (the “Treasury”), issued guidance in the form of Frequently Asked Questions (“FAQs”) on PPP Loan Forgiveness. Some longstanding questions were answered (e.g., what is transportation under utilities? See below for the answer), other questions were not, and some FAQ answers raise new questions. The FAQs are structured in four categories: (i) General Loan Forgiveness FAQs (3 in this section), (ii) Loan Forgiveness Payroll Cost FAQs (8 in this section), (iii) Loan Forgiveness Nonpayroll Costs FAQs (7 in this section), and (iv) Loan Forgiveness Reductions FAQs (5 in this section). In this outline, we will revisit how we got here and address some of the key FAQs that resolve questions related to the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”).

  • INSIGHT: Taking Another Look at the Foreign-Derived Intangible Income DeductionJuly 24, 2020

    The Foreign-Derived Intangible Income (FDII) income deduction is not the simplest of calculations. Gwayne Lai, Amanda Scott, and Yair Holtzman of Anchin show how some taxpayers can use existing R&D data to get a head start.

  • Credit managers to exploit market dislocations - firms raising capital and preparing to pounce on opportunities they see in distressed sectorsJuly 13, 2020

    "We have a health crisis and an economic crisis and they go hand in hand... It's hard to predict where the markets are going to end up," said Olamide "Lami" Ajibesin.

  • OCIE Warns Private Fund Advisers About Common Compliance IssuesJuly 9, 2020

    On June 23rd, the Securities and Exchange Commission’s Office of Compliance Inspections and Examinations (OCIE) issued a Risk Alert for private fund advisers, including those that manage hedge funds or private equity funds. The report cautioned about common compliance issues that increase fees for investors and put them at risk. OCIE broke these issues down into three categories.

  • Paycheck Protection Program (PPP) Loan Forgiveness Interim Final Rules ReleasedJune 26, 2020

    Additional guidance has been released on the PPP Loan Forgiveness process. This guidance is critical to converting PPP Loans into the “grants” that many businesses need to survive. Carefully following the guidelines will allow you to maximize loan forgiveness.

  • Economic Injury Disaster Loans (EIDL) Portal Reopening Offers Additional Relief For BusinessesJune 23, 2020

    Last week, the Small Business Administration (SBA) resumed accepting new online applications for EIDL and related emergency grants. 

  • Key Insights for Fund Managers on Raising Capital in the Current ClimateJune 22, 2020

    While raising capital for hedge funds has always been a challenge, the COVID-19 pandemic has made doing so even more difficult. New limits on travel and face-to-face contact are making it difficult to reach investors and complete the required due diligence for fundraising. In this article, we look at how investor expectations have changed in this new environment, and what managers can do to meet these challenges.

  • New EZ and Revised PPP Forgiveness Applications for the Paycheck Protection Program (PPP) ReleasedJune 18, 2020

    On June 17, 2020, the Small Business Association (SBA) in consultation with the Department of the Treasury, posted a revised PPP loan forgiveness application and instructions (Form 3508 - revised June 16, 2020), which implements the PPP Flexibility Act of 2020 that was signed into law on June 5, 2020. In addition, the SBA also published a new “EZ” version of the loan forgiveness application – Form 3508EZ.

  • Which Hedge Funds Strategies Performed Best During the Recent Financial Crisis?June 12, 2020

    The immediate shock of the COVID-19 crisis sent markets tumbling. In this tough environment, the defensive strategies of hedge funds revealed their value. We looked at the results to see how the industry did overall, along with the fund strategies that performed best during these unusual conditions.

  • The Latest Updates on the Paycheck Protection Program Flexibility Act and the Main Street Lending ProgramJune 10, 2020

    Late Monday, the SBA and Treasury issued a joint press release that was followed by a press release from the Federal Reserve (“The Fed”).

  • Guidance on Cyber Threats to Private Equity and Hedge FundsJune 8, 2020

    As the corporate world is evolving and becoming more accepting of working remotely, every company is facing the increased threat of cybercrimes. In 2019, the average cost of a data breach in the U.S. was more than $8 million, and the average time spent to identify and contain a breach was around 245 days. These numbers will continue to grow as cyber criminals become even more sophisticated.

  • PPP Flexibility Act Becomes LawJune 8, 2020

    The U.S. government has enacted changes to the Paycheck Protection Program (“PPP”) including the relaxation of PPP Loan Forgiveness rules with the goal of making it easier for many businesses to qualify for loan forgiveness on a larger portion of their loans. These changes were signed into law on Friday, June 5, 2020 through the Paycheck Protection Program Flexibility Act of 2020 (PPPFA). This new legislation contains many important changes to the PPP.

  • Proposed Carried Interest Regulations Are Back at OIRA for a Second LookJune 5, 2020

    The Office of Management and Budget’s (OMB) Office of Information and Regulatory Affairs (OIRA) has again received for review, proposed regulations with respect to section 1061— often referred to as the carried interest rules. The battle over carried interest continues as proposed rules are back at the OMB for review after the OMB initially signed off on them in late February 2020.

  • Congress Provides Welcome Modifications to PPP In New BillJune 4, 2020

    Congress has acted to change the Paycheck Protection Program (“PPP”) including to relax PPP Loan Forgiveness rules with the goal of making it easier for many businesses to qualify for loan forgiveness on a larger portion of their loans. The extended “shutdown” of many areas begged for an extension to the forgiveness period as well as an easing of other requirements of the program. The President’s approval is still required to enact this legislation.

  • Federal Reserve Releases Further Guidance on $600 Billion Main Street Lending ProgramJune 1, 2020

    On May 27, 2020, the Federal Reserve Bank of Boston released FAQs and form documents for the Main Street Lending Program, signaling that loans under this program will be made available soon.  This Anchin Alert updates and supplements our previous Anchin Alert regarding the Main Street Lending Program issued on May 5, 2020.

  • Is There Opportunity for Private Equity and Hedge Funds on the Horizon?May 21, 2020

    The COVID-19 crisis has devastated the national economy. Tens of millions of Americans have lost their jobs and the stock market has fallen significantly. However, these brutal market conditions may have created an opportunity for private equity funds and hedge funds.

  • What the PPP Forgiveness Guidelines Mean For YouMay 18, 2020

    The long awaited forgiveness procedures have been released after much delay and offer new details, yet leave many questions open. Here is an overview of what we know so far. 

  • What Partnerships and Seasonal Employers Need to Know About Requesting Additional PPP Loan AmountsMay 15, 2020

    Anchin’s COVID-19 Resource Team continues to monitor ongoing updates to the PPP Program. Borrowers need to understand how these changes and clarifications may affect their application, loans and forgiveness. Here are new updates related to partnerships and seasonal employers.

  • Important PPP Loan Update: FAQ #46 AND #47 Safe Harbor Guidance on Economic Uncertainty CertificationsMay 14, 2020

    Additional guidance has been released related to how borrowers' certification of necessity for Paycheck Protection Program (PPP) loans will be evaluated by the Treasury. This topic has caused concern among borrowers since additional restrictions and conditions have been placed on PPP loans throughout the application and borrowing process. Here is some key information to assist you.

    The Department of the Treasury (the “Treasury”) has issued further guidance to borrowers who are required to make good-faith certifications concerning the necessity of their PPP loan requests.  Since the passing of the CARES Act on March 27, 2020, the Treasury has issued 47 Frequently Asked Questions (FAQs) for PPP loans and responses. On May 13, 2020, the Treasury published FAQ #46: How will SBA review borrowers’ required good-faith certification concerning the necessity of their loan request?  The Treasury’s answer separates PPP borrowers into two groups based on their loan size: borrowers with loans less than $2 million and more than $2 million.

    In addition, the Treasury published FAQ #47 which addresses the interim final rule posted on May 8, 2020.  That rule provided that any borrower who applied for a PPP loan and repays the loan in full by May 14, 2020 will be deemed by SBA to have made the required certification concerning the necessity of the loan request in good faith.

  • Important PPP Loan Update: FAQ #46 Safe Harbor Guidance on Economic Uncertainty CertificationsMay 13, 2020

    Additional guidance has been released related to how borrowers' certification of necessity for Paycheck Protection Program (PPP) loans will be evaluated by the Treasury. This topic has caused concern among borrowers since additional restrictions and conditions have been placed on PPP loans throughout the application and borrowing process. Here is some key information to assist you.

  • Additional Relief: Federal Reserve Releases Additional Guidance on $600 Billion Main Street Lending ProgramMay 5, 2020

    On Thursday, April 30, 2020, the Treasury Department and the Federal Reserve (the “Fed”) released updated guidance on the Main Street Lending Program, which is comprised of the Main Street Expanded Loan Facility (the “Expanded Loan” or “MSELF”), the Main Street New Loan Facility (the “New Loan” or “MSNLF), and a newly added third option, the Main Street Priority Loan Facility (the “Priority Loan” or “MSPLF”).  Together, these three facilities comprise $600 billion of funding for loans to small and mid-sized companies on favorable terms in order to provide additional COVID-19-related financial relief. 

  • What to Know About the Research & Development (R&D) Tax Credit and the IRS’ New Compliance CampaignMay 1, 2020

    The R&D tax credit can be a powerful incentive, often providing a hidden source of cash from prior years’ expenses while also serving to significantly reduce current and future years’ federal and state tax liabilities. The R&D tax credit is also a tool for refueling a company’s R&D efforts. Planning ahead by creating an infrastructure that identifies qualifying research activities and collects contemporaneous documentation is essential to reducing future tax liabilities and synthesizing an R&D tax credit that will be sustainable on audit examination. There has been a new development related to this credit. 

  • IRS Update: Deductions Related to Forgiven PPP Loans Are Non-DeductibleMay 1, 2020

    Late yesterday, the Internal Revenue Service (“IRS”) issued Notice 2020-32, relating to the deductibility, for Federal Income Tax purposes, of the expenses paid with the proceeds of a PPP loan that is subsequently forgiven.  

  • Hedge Funds and Private Equity Firms Deemed Ineligible for PPP Loans by SBAApril 27, 2020

    The same day that legislation (April 24th) increasing funding by $310 billion for the Paycheck Protection Program (“PPP”) was signed into law, the Treasury Department issued a new Interim Final Rule.  This Final Rule clarified certain types of businesses that are eligible for PPP loans. Specifically, the Treasury has determined that hedge funds and private equity firms are ineligible businesses for purposes of PPP.

  • Starting the Week with Critical Updates to the SBA Paycheck Protection ProgramApril 27, 2020

    There have been additional developments over the last several days regarding the Paycheck Protection Program (PPP) and the only thing we can say with certainty is that more changes will come!

  • Private Investment Funds, Related Entities and Individuals Can Benefit From COVID-19 ReliefApril 21, 2020

    The COVID-19 pandemic has put significant stress on the liquidity and profits of hedge funds, private equity/venture capital funds and their respective portfolio companies. On March 18, 2020, the Families First Coronavirus Response Act and on March 27, 2020, the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”) were signed into law. Given these uncertain times and the multitude of changes, provisions and opportunities these laws present, we’ve prepared a general summary of certain relevant matters that private investment funds, related entities and individuals should consider in order to help navigate this crisis. Accordingly, please use this guide for general information purposes only, and please reach out to us with any specific questions or issues you have.

  • A Message from Anchin's Financial Services GroupApril 15, 2020

    We here at Anchin hope that you and your loved ones are healthy and staying safe during these trying times. Our team has been closely monitoring the latest COVID-19 developments, particularly the recently enacted Coronavirus Aid, Relief, and Economic Security (CARES) Act and Paycheck Protection Program Loans (“PPP”). As a resource, we recommend you visit our COVID-19 Update Center which is updated daily and features a wide variety of informational articles about new programs, many of which are applicable to the Financial Services industry.

  • Important Reminder – Update Your Calendar For New Tax DatesApril 14, 2020

    The COVID-19 pandemic has changed so much about our personal and financial lives. One item to keep in mind is that the Internal Revenue Service, along with most states, have changed the due date for filing income tax returns and paying your balances for 2019, as well as your 1st and 2nd quarter estimated tax payments for 2020.

  • The Cayman Islands Launch New Legislation for Private and Mutual FundsMarch 4, 2020

    The Cayman Island government recently passed new laws for private and mutual funds, designed under recommendations from the European Union (“EU”) and other international governments. They created these regulations to increase oversight and confidence in Cayman Islands funds, while still making it a popular jurisdiction for fund formation. This article covers the upcoming requirements under these laws along with when they will go into effect. One should be aware that the Cayman Islands government defines “Mutual Funds” and “Private Funds” slightly differently than we would in the U.S., so we’ve attempted to clarify, below.

  • Don’t underestimate costs and need for planning - Interview with Jeffrey I. RosenthalJanuary 30, 2020

    Anchin's Financial Services Practice Leader Jeffrey I. Rosenthal explains how to mitigate the challenges of launching a hedge fund with preparation, planning, and asking the right questions in Hedgeweek's U.S. Hedge Fund Startup Guide 2020.

  • The Seven SEC Compliance Examination Priorities for 2020January 28, 2020

    At the start of every year, the SEC Office of Compliance Inspections and Examinations (OCIE) announces a list of its priorities for the next examination cycle. These represent the areas they feel are key sources of risk for investors and markets. For 2020, they named seven focus areas.

  • SEC Annual Report Shows Record Enforcement of Asset Management IndustryJanuary 17, 2020

    Near the end of each year, the SEC’s Enforcement Division publishes a report listing their past actions along with future priorities. They recently released their 2019 report and what stands out is last year’s record enforcement of the asset management industry. We’ve summarized the most important parts of the report here.

  • Expanded Accredited Investor Definition Could Be Coming SoonJanuary 16, 2020

    If someone wants to invest in SEC-exempt private market assets, like hedge funds and venture capital funds, they must meet the SEC’s standards as an accredited investor. The SEC limits who can invest in these assets because they believe non-accredited investors do not have the sophistication or knowledge to understand these investments, or their risks.

    However, these markets could be opening soon. On December 18th, 2019, the SEC commissioners voted three to two for expanding the accreditation scope to include more potential investors. Here’s what could be changing.

  • IRS Issues Notice Delaying Certain Aspects of Partnership Reporting RequirementsDecember 12, 2019

    With Notice 2019-66 (“Notice”), issued on December 9, the IRS reversed course and is delaying some partnership reporting requirements that were outlined in our earlier alert after many practitioners contended that they would not be able to comply under such a tight timeframe. The Notice provides that the requirement to report partners’ shares of partnership capital on the tax basis method will not be effective for 2019 (for partnership taxable years beginning in calendar 2019) but will be effective starting in 2020 (for partnership taxable years that start on or after Jan. 1, 2020). Instead, for 2019, partnerships and other persons must report partner capital accounts consistent with the reporting requirements in the 2018 forms and instructions, including the requirement to report negative tax basis capital accounts on a partner-by-partner basis. These partnerships and other persons must include a statement identifying the method upon which a partner’s capital account is reported. The final instructions for the 2019 forms are expected to include additional details on how such reporting should be done.

  • 2019 Financial Services Year-End Tax Planning AlertDecember 5, 2019

    As we continue to monitor the prospects of regulations, guidance and potential new tax reform and as year-end approaches, you should consider the following opportunities as you review your tax picture. 

  • SEC Considers Opening Private Equity to Main Street Investors. Good Idea?December 3, 2019

    Private equity has been one of the top performing asset classes over the past decade. However, due to current regulations, the typical American investor hasn’t been able to participate in these gains. That could change soon. Earlier this year, the SEC asked for public comment about whether it should open private equity investments to retail investors. Here are some of the pros and cons of the agency doing so.

  • Recently Released Draft Partnership Instructions and Schedule K-1 Raise QuestionsNovember 14, 2019

    The newly released draft 2019 partnership tax return instructions and Schedule K-1 reflect changes resulting from the Tax Cuts and Jobs Act (TCJA), as well as from other IRS initiatives. This article will highlight some of those changes, with a focus on new IRS reporting requirements related to their effort to track partners’ tax basis capital.

  • How Can Hedge Funds Raise Capital More Effectively?August 21, 2019

    Raising capital for a hedge fund is a process. At a time when the industry has seen four straight quarters of capital outflows, it’s more important than ever for fund managers to know how, where and why they will attract investors. By understanding the mindset of investors as well as their concerns, you can improve your fund raising results.

  • SEC Explores Softening Accredited Investor StandardsJuly 11, 2019

    On June 18th, the SEC issued a comment release for feedback on possibly loosening the accredited investor definition. This would potentially allow more investors to contribute to private funds and other restricted investments. Here’s what they’re considering and what could happen next.

  • Financial and Other Considerations When Starting a Private Equity or Venture Capital FundMay 9, 2019

    Getting a private equity or venture capital fund off the ground takes more than a successful investment strategy. From the outset, you need to consider and plan for the lifespan of the fund, from concept to realization and eventual liquidation. These funds are far more complex and require significantly more financial planning than a typical long-short equity fund.

  • The OCIE Lays Out Six Examination Priorities for 2019January 11, 2019

    Every year, the SEC’s Office of Compliance Inspections and Examinations (OCIE) publishes a report listing their priorities for upcoming examinations. For 2019, they will focus their attention on six categories.

  • 2018 Financial Services Year-End Tax Planning AlertDecember 19, 2018

    With the passage of the Tax Cuts & Jobs Act (the “Tax Act”) in December of 2017, the impact on funds, their owners/managers and investors has been anything but clear. The Tax Act was rushed into law, is extremely complex and still has many unanswered questions to unclear sections of the new law. However, unlike last year at this time, we do not foresee any new tax legislation before year-end 2018 nor is it clear that guidance or technical corrections will be forthcoming to address some of the open questions affecting funds, fund managers and their investors.

  • Finally Some Digestible Meal and Entertainment GuidanceOctober 3, 2018

    On October 3rd, the Internal Revenue Service released Notice 2018-76 providing transitional guidance on how the Tax Cuts & Jobs Act changes to the deductibility of Entertainment expense affects the 50% deductibility of business Meals that taxpayers and professionals had been hungering for. While the guidance is transitional, it provides clarity on some of the issues we had previously provided comments on:

  • Cybersecurity for Investment Partnerships, Private Equity and Real Estate Funds - Responding to a Growing ThreatJuly 30, 2018

    Investment partnerships, private equity and real estate funds are tempting targets for cybercriminals thanks to their financial assets, sensitive customer information, and access to institutional counterparts. And the threat is growing quickly. Recent studies report that fifty five percent of limited partners in private equity funds expect a serious cyberattack on their firms within the next five years. How can you keep your fund safe? Let’s take a look at the current threats and latest recommendations from the SEC.

  • Anchin offers analysis of the 2017 Tax Cuts and Jobs Act in relation to the value of equity interestsJune 21, 2018

    Hedgeweek highlights our analysis of how the 2017 Tax Cuts and Jobs Act will impact the value of equity interests, and why the potential impact could be very different than what many experts expect.

  • Department of Commerce Form BE-12 Benchmark Survey of Foreign Direct Investments in the United States May be Required for U.S. Fund ManagersMay 22, 2018

    Form BE-12 (Benchmark Survey of Foreign Direct Investments in the United States) is required to be filed every fifth year, in place of Form BE-15 (which is for annual reporting that falls outside of the five-year reporting). This Form is filed with the U.S. Department of Commerce’s Bureau of Economic Analysis (“BEA”). The next Form BE-12 filing is due on May 31, 2018 (June 30, 2018 if using the BEA’s e-file system).

  • Did the Tax Cuts and Jobs Act of 2017 Increase the Value of Equity Interests?May 22, 2018

    At first glance, a business or equity owner might conclude that the Tax Cuts and Jobs Act of 2017 (the “Act”) increased the value of equity interests by 20% upon its signing by the President. By cutting corporate level taxes, the value of any business would, on the surface, immediately rise. However, the answer is not so straightforward.

  • Impact of the Recent Tax Reform on the Private Equity IndustryMay 15, 2018

    The Tax Cuts and Jobs Act (the “Tax Act”), which was signed into law on December 22, enacted a broad range of changes with most provisions taking effect for tax years beginning after December 31, 2017. This alert summarizes some of the key (federal) tax provisions of the Tax Act affecting the private equity industry.

  • Excess Business Losses: How Will This Affect You?April 17, 2018

    The Tax Cuts and Jobs Act (TCJA) modified the existing tax law on excess business losses, which previously specifically limited only “Excess farm losses.” The TCJA expanded the law to limit losses from all types of business for taxpayers other than corporations. In other words, tax payers may not be able to fully offset business losses against other types of income, as in the past.

  • Mnuchin: IRS will close S Corp carried interest “loophole”February 16, 2018

    E. George Teixeira, Tax Partner in Anchin's Financial Services Practice, comments on the IRS' plan to issue guidance that would allow hedge fund managers to avoid new carried interest restrictions.

  • SEC Announces 2018 Compliance Examination PrioritiesFebruary 16, 2018

    As they have for many years, the SEC announced its 2018 Office of Compliance Inspections and Examinations (OCIE) examination priorities.

  • Tax Cuts and Jobs Act Substantially Limits Meals and Entertainment DeductionFebruary 14, 2018

    The 2017 Tax Cuts and Jobs Act introduced some significant limitations to the meals and entertainment deduction. The new law makes two major changes to the meals and entertainment rules, which can impact your business.

  • Tax Court Ruling That Family Office Carried on a Trade or Business May Offer Tax Planning Opportunities February 5, 2018

    On December 13, 2017, in Lender Management, LLC v. Commissioner, the U.S. Tax Court ruled that a family office, Lender Management, LLC (“Lender Management”), carried on a trade or business as an investment manager rather than as a passive investor and was therefore entitled to deduct expenses under §162 (“deductible above-the-line with no income limitation”) vs. §212 (“miscellaneous itemized deductions subject to the 2% of adjusted gross income (AGI) floor”). 

  • Tax Cuts and Jobs Act: Key provisions affecting Hedge Funds, Private Equity Funds and Other Investment Funds or Fund VehiclesJanuary 17, 2018

    The Tax Cuts and Jobs Act (the “Tax Act”), which was signed into law on December 22, 2017, enacts a broad range of changes with most provisions taking effect for tax years beginning after December 31, 2017. This alert summarizes some of the key (federal) tax provisions of the Tax Act affecting managers of hedge funds, private equity funds and other investment funds or fund vehicles.

  • Tax Cuts and Jobs Act Offers Favorable Tax Breaks for BusinessesDecember 28, 2017

    The Tax Cuts and Jobs Act (TCJA), which was signed into law on December 22, contains a treasure trove of tax breaks for businesses. Overall, most companies and business owners will come out ahead under the new tax law, but there are a number of tax breaks that were eliminated or reduced to make room for other beneficial revisions. Here are the most important changes in the new law that will affect businesses and their owners.

  • The Tax Cuts and Jobs Act Overrides the Tax Court Decision in Grecian Magnesite Mining While the IRS Seeks to Appeal the Same DecisionDecember 28, 2017

    In a decision handed down in the summer, the U.S. Tax Court refused to accord deference to an Internal Revenue Service (IRS) administrative ruling treating the sale of partnership interests as the sale of assets the partnership uses in a U.S. trade or business, thereby subjecting the resulting gain to taxation as income effectively connected with a U.S. trade or business. The recently passed tax reform law overrides the Tax Court decision. Meanwhile, the IRS intends to appeal against the same decision.

  • CFTC Suggests It Has Broader Jurisdiction Over Virtual Currencies, Including ICOsDecember 13, 2017

    The Commodity Futures Trading Commission (CFTC) recently published a primer to educate the public on virtual currencies. In the explanation, the CFTC outlined its position regarding its role regulating virtual currencies. The primer suggests that the CFTC sees itself having jurisdiction over certain virtual currency transactions, including Initial Coin Offerings (ICOs).

  • How the Senate Tax Bill Could Cost YouDecember 11, 2017

    A provision in the Senate’s tax plan would take away an investor’s ability to specifically identify which stock shares they relieve when they go to sell their holdings. The provision would require investors selling a portion of a position in stock to sell their oldest shares first, also known as first-in-first-out, or FIFO. This provision is slated to take effect on stock sales starting on January 1, 2018 and is estimated to increase government revenue by $2.7 billion over the next 10 years. The House tax bill, released in early November 2017, did not address this topic.

  • 2017 Financial Services Year-End Tax Planning AlertDecember 6, 2017

    With Donald Trump in the White House and Republicans maintaining a majority in Congress comes the real possibility of some dramatic changes in tax law. 

  • U.S. Research and Development Tax CreditOctober 30, 2017

    Yair Holtzman, Leader of Anchin's Research and Development Tax Credits Group, explains how the credit works and shares his findings on the impact of the PATH Act.

  • Year-End Tax Planning for Businesses: Looming Tax Reform Creates Planning ChallengesOctober 30, 2017

    As the end of 2017 approaches, the prospect of dramatic tax reform makes year-end tax planning especially challenging. In late September, the Trump administration and Republican congressional leaders unveiled their Unified Framework for Fixing Our Broken Tax Code. The framework proposes reduced tax rates for businesses as well as changes to a variety of business tax benefits. But there’s a great deal of uncertainty over when — and if — tax reform will be implemented and which proposals could make their way into possible new tax legislation.

  • SEC Rules that Digital Assets Can Be Treated as Securities, Fall Under Federal Securities LawOctober 10, 2017

    Since their launch, cryptocurrencies and other digital assets have operated in a regulatory grey area. Should they be treated as currencies? Securities? As something completely different? In a July report, the SEC clarified the situation and set a new precedent: Digital assets can be treated as securities and fall under federal securities law.

  • Top Lessons from the 2017 SEC Cybersecurity ReportOctober 2, 2017

    Cybersecurity continues to be a top priority for the SEC. They recently reviewed 75 firms, including broker-dealers, investment advisers, and investment companies, to see what the financial industry is doing well related to cybersecurity, as well as what needs to be improved. Firms should use this information to evaluate and improve their own protection of client data and be aware of these issues which the SEC will be on the lookout for during future inspections.

  • Tax Court Refuses to Follow Rev. Rul. 91-32 in Grecian Magnesite Mining DecisionAugust 23, 2017

    In a recent decision, the U.S. Tax Court refused to accord deference to an Internal Revenue Service (IRS) administrative ruling treating the sale of partnership interests as a sale of assets the partnership uses in a U.S. trade or business, thereby subjecting the resulting gain to taxation as income effectively connected to a U.S. trade or business.

  • Proposed Carried Interest Bills Still AliveJuly 10, 2017

    Earlier this year, we shared information with you about several proposed bills that would increase taxes due on investment performance allocations, commonly known as carried interest. Carried interest is the share of profits that fund managers receive in exchange for managing investments. The controversy over carried interest arises because the current tax rules allow managers to pay taxes on portions of the carried interest allocation at the (long term) capital gains rate rather than the higher tax rate that normally applies to ordinary income.

  • SEC Clarifies Three Confusing Situations For The Custody RuleMay 25, 2017

    The SEC’s Custody Rule continues to be a headache for registered investment advisers. The conditions are so unclear, it’s easy to inadvertently trigger custody rule violations. To help advisers adjust, the SEC recently issued clarification for three confusing situations under the rule.

  • SEC Identifies Top 5 Compliance Issues Found in OCIE ExaminationsApril 6, 2017

    Call it a wake-up call for registered investment advisers—the Securities and Exchange Commission (SEC) issued a Risk Alert, highlighting the top five compliance issues found in deficiency letters sent to SEC-registered investment advisers.

  • Tax Update: Proposed Bill Closing Tax Loophole Could be a Boon for Connecticut; IRS Recent Audit Targeting Management Fee WaiversMarch 30, 2017

    The Connecticut state legislature earlier this year proposed a bill that would slap a new 19 percent tax on investment management services fees, also known as “carried interest.” Similar bills are planned, or have been introduced, in other states including New York, New Jersey, Massachusetts and Rhode Island. The Connecticut bill would only be effective if similar bills are passed in these other states.

  • Connecticut Bill Seeking 19% State Surcharge on Hedge Funds Has a TwistMarch 9, 2017

    Bruce McGuire, president of the Connecticut Hedge Fund Association, was attending the Managed Funds Association annual meeting earlier this year in Miami when he started chatting with some of his colleagues about the potential impact of recently proposed legislation in Connecticut that would slap a 19 percent surcharge on hedge funds based in the Nutmeg State.

  • 2017 SEC Examination Priorities Feature Three New Areas of FocusFebruary 2, 2017

    As they have done annually for the last several years, the Securities and Exchange Commission has announced their Examination Priorities.

  • As Curtain Falls on Deferral Era, Investment Fund Managers Brace for ChangesJanuary 25, 2017

    This is not a test. It’s been a long time coming, but the deferral era is about to end. Not with a bang or a whimper, but investment fund managers are scrambling to ensure that any significant amount of pre-2009 deferred fees owed to them are payable during the next 12-13 months. Their livelihoods depend on it.

  • Follow the Bouncing Ball: Newly Revised Cybersecurity Regulations Scheduled for March 1 in New YorkJanuary 17, 2017

    Newly revised cybersecurity regulations for financial service companies in New York are scheduled to take effect March 1, 2017. The effective date for the new rules follows a two-month delay, as the New York State Department of Financial Services (“NYDFS”) made changes to the proposed regulation due to industry concerns.

  • Preparing for Revised Form ADV Taking Effect in 2018December 29, 2016

    Registered investment advisers have started to brace for 2017. They’re creating new offerings and expanding the breadth of their portfolios. However, investment advisers need to think well beyond next year, to the first quarter of 2018. Their livelihoods depend on it.

  • Financial Services Companies Brace for New Cybersecurity RequirementsDecember 14, 2016

    The New York State Department of Financial Services is taking the bull by the horns when it comes to how regulated financial services companies protect themselves and their customers from cyberattacks.

  • 2016 Financial Services Year-End Tax Planning AlertDecember 5, 2016

    With the election of Donald Trump and a Republican control of Congress, tax reform is expected.

  • Anchin, Block & Anchin Recognized as Best North American Accounting Firm in Hedgeweek USA AwardsSeptember 23, 2016

    New York-based Top 100 accounting and advisory firm Anchin, Block & Anchin LLP has once again been named the Best North American Accounting Firm in the annual Hedgeweek awards. This award reinforces Anchin’s status as a leader in the Financial Services industry.

  • Net Worth Threshold for “Qualified Clients” Increased by SECJuly 28, 2016

    The U.S. Securities and Exchange Commission (“SEC”) has decided to increase the net worth test threshold for “qualified clients” effective August 15, 2016.

  • Chapter 1: Legal & tax structuringMay 16, 2016

    Jeffrey I. Rosenthal, Partner-in-Charge of Anchin's Financial Services Practice explains some of the criteria for making fund structuring decisions.

  • Financial budgeting: One chance to succeedMay 16, 2016

    Jeffrey I. Rosenthal, Partner-in-Charge of Anchin's Financial Services Practice talks about planning a hedge fund launch.

  • Anchin, Block & Anchin Recognized as Best Global Accounting Firm for Sixth Consecutive Year in Hedgeweek AwardsMarch 9, 2016

    Top tier accounting firm Anchin, Block & Anchin LLP has received Hedgeweek’s Best Global Accounting Firm award for the sixth consecutive year.

  • New Tax Audit Rules Constitute a Radical Change for PartnershipsJanuary 27, 2016

    Late in 2015, Congress passed the Bipartisan Budget Act of 2015 (the Act), which includes a complete overhaul of the procedures that apply to Internal Revenue Service (IRS) audits of partnerships and limited liability companies (LLCs) taxed as partnerships and their partners.

  • 2016 SEC & FINRA Exam PrioritiesJanuary 25, 2016

    The Office of Compliance Inspections and Examinations (“OCIE”) of the Securities and Exchange Commission (“SEC”) and the Financial Industry Regulatory Authority (“FINRA”) have released their Exam Priorities for 2016. Each of the regulators have organized their focus around a number of key issues.

  • FinCEN Proposes Rules for Investment Advisers to Establish Anti-Money Laundering ProgramsOctober 16, 2015

    On August 25, 2015, the Financial Crimes Enforcement Network (FinCEN) published a Notice of Proposed Rulemaking (the "Proposed Rule") that would require certain investment advisers registered with the U.S. Securities and Exchange Commission to establish anti-money laundering (AML) programs and report suspicious activity to FinCEN under the Bank Security Act (the "BSA").

  • Cybersecurity AlertFebruary 10, 2015

    This past week saw a flurry of alerts regarding cyber security from both the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA) underscoring the emphasis on cybersecurity across all areas of the financial services industry for both institutions and investors.

  • 2015 SEC Examination Priorities AnnouncedJanuary 20, 2015

    Last week, the SEC announced its examination priorities for 2015. Three themes highlighted the areas of focus for the SEC’s Office of Compliance Inspections and Examinations ("OCIE"): Protection of retail investors and investors saving for retirement, assessing market-wide risk and using enhanced data analysis to identify those engaged in potential illegal activity.

  • 2014 Financial Services Year-End Tax Planning AlertDecember 3, 2014

    The November 4 midterm elections resulted in a shake-up on Capitol Hill that will put Republicans in charge of both the House and the Senate when 114th Congress convenes in January 2015. In the meantime, tax reform and tax extender discussions have taken a back seat to the election of party leaders in the House and Senate as well as leadership changes to the various tax-writing committees.

  • Custody Rule Update: Guidance for SPVs and EscrowsJuly 14, 2014

    The Division of Investment Management of the Securities and Exchange Commission (the "SEC") provided an Investment Management Guidance Update (the "Update") regarding the Custody Rule (Rule 206(4)-2) under the Investment Advisers Act of 1940, as amended (the " Custody Rule").

  • Revenue Ruling 2014-18 – New Possibilities to Defer Offshore Compensation of Hedge Fund Managers and EmployeesJune 30, 2014

    On June 10, 2014, the Internal Revenue Service issued a ruling holding that non-statutory (or nonqualified) stock options ("NSO") and stock-settled stock appreciation rights ("SARs") are not subject to Internal Revenue Code Section 457A ("Section 457A").

  • SEC Announces Initiative Directed at Never-Before Examined Registered Investment AdvisersMarch 3, 2014

    The Securities and Exchange Commission announced that its Office of Compliance Inspections and Examinations (OCIE) is launching an initiative directed at investment advisers that have never been examined, focusing on those that have been registered with the SEC for three or more years.

  • SEC Examination Priorities for 2014February 12, 2014

    The Securities and Exchange Commission’s (SEC’s) Office of Compliance Inspections and Examinations recently published the priorities of its National Exam Program (NEP) for 2014. Under this program, the SEC conducts examinations of registered entities, including broker-dealers, transfer agents, investment advisers, investment companies, the national securities exchanges, clearing agencies, self-regulatory organizations, municipal advisors, and others.

  • FATCA – “Ready or Not” – Online Registrations Can be Finalized and SubmittedJanuary 23, 2014

    Under the Foreign Account Tax Compliance Act (FATCA), withholding agents must withhold tax on certain payments to Foreign Financial Institutions (FFIs) that do not agree to report certain information to the IRS about their U.S. accounts, including the accounts of certain foreign entities with substantial U.S. owners. An FFI may agree to report certain information about its account holders by registering to be FATCA compliant.

  • COVID-19 Update Center

    The Anchin COVID-19 Update Center is available to simplify your access to critical financial information. It is updated regularly to supplement your communications with your…

  • How Does Tax Reform Impact You?

    6 Recent Tax Law Changes That Technology Companies Need to Know07/25/2019 Automatic Extension Available for Making Portability Election1/31/2019 What Should Businesses Know About Qualified Opportunity Zones?1/15/2019 How Can…

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