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Income Taxes › Tax Liability › Investment Funds

Income taxes are taxes that are collected on the individual earnings of persons or entities. Depending on the jurisdiction, income taxes are calculated and collected in a variety of ways. Some tax systems collect... more +
Income taxes are taxes that are collected on the individual earnings of persons or entities. Depending on the jurisdiction, income taxes are calculated and collected in a variety of ways. Some tax systems collect income taxes based on a progressive scheme, while others may utilize a proportional or regressive framework. less -
ASKramer Law

Tax-Loss Harvesting Part III: Investment Strategies

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Taxpayers invest to make money and hope to earn a decent return on their investments. Tax-loss harvesting can be used as part of a taxpayer’s overall investment strategy without affecting investment  returns, while offsetting...more

Cadwalader, Wickersham & Taft LLP

Congress Targets Partnership Disguised Sales and Services

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Both the House’s and Senate’s budget bills would clarify that certain rules applicable to disguised payments for services and disguised sales of property between a partner and a partnership under Section 707(a)(2) are...more

DLA Piper

Senate Tax Bill: Key Points for the Investment Funds Industry

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The US Senate released a draft tax bill (Senate Tax Bill) on June 16, 2025. We explore five key takeaways for fund sponsors, investors, and the broader asset management community, with a focus on how the Senate Tax Bill...more

Stinson LLP

U.S. Tax Court Issues Ruling on Self-Employment Tax Exception for Limited Partners

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On Wednesday, May 28, the U.S. Tax Court ruled in Soroban Capital Partners LP v. Commissioner that a "functional analysis" test applies when determining whether a limited partner who contributes services to a partnership may...more

Hogan Lovells

The limited partner exception from self-employment taxes: Soroban II

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The latest chapter in the IRS attack on the use of a self-employment tax exception by fund managers came in the form of another Tax Court opinion last month in Soroban Capital Partners LP v. Commissioner (“Soroban II”) The...more

Rivkin Radler LLP

The Limited Partner Exclusion From Self-Employment Tax – But Who Is A Limited Partner?

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An Agency Under Siege - The mission statement of the IRS reminds taxpayers that it is their responsibility to understand and meet their tax obligations, while it is the role of the IRS to “enforce the [tax] law with...more

Husch Blackwell LLP

U.S. Tax Court Rules That Limited Partners of an Investment Manager Are Subject to Self-Employment Tax

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On May 28, 2025, the United States Tax Court held that the limited partners of a limited partnership providing investment management services to various investment funds were not limited partners within the meaning of...more

Troutman Pepper Locke

The One Big Beautiful Bill: Initial Analysis of Key Provisions for Private Equity Funds and Their Portfolio Companies

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On May 22, the House of Representatives passed H.R. 1, the budget reconciliation bill known as the One Big Beautiful Bill Act (the BBB). The BBB proposes amendments to the Internal Revenue Code (the Code) that could have...more

Goodwin

UK Government announces update on new carried interest tax regime

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On June 5, 2025, the UK Government announced the result of their recent consultation process regarding their plans to bring carried interest within the income tax regime from April 2026, subject to an effective tax rate of...more

White & Case LLP

The IRS Continues Winning Self-Employment Contributions Act (SECA) Tax Against Limited Partners in Private Equity and Hedge Funds

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Recently, the Internal Revenue Service ("IRS") has successfully asserted that limited partners in private equity and hedge funds that are organized as limited partnerships were subject to tax under the Self-Employment...more

WilmerHale

Court Decision on Limited Partner Exception to Self-Employment Tax

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On May 28th, the U.S. Tax Court issued a decision in Soroban Capital Partners LP v. Commissioner (T.C. Memo 2025-52) holding that all of the income allocable to the partnership’s limited partners (not just the amount...more

Eversheds Sutherland (US) LLP

The One Big Beautiful Bill’s impact on investments in BDCs

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On May 14, 2025, the House Ways and Means Committee approved the so-called “One Big Beautiful Bill” (Bill). We have issued several other alerts regarding the Bill. Among other tax provisions, the Bill includes two provisions...more

Foley & Lardner LLP

YA Global Heads to Appeals Court Over Tax Court Ruling on Offshore Fund’s U.S. Activities

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Share on LinkedIn Share on Twitter Print Share by Email Share Back to top Last month, YA Global Investments, LP (the “Fund”) filed a notice of appeal to the U.S. Court of Appeals for the Third Circuit, seeking review of the...more

Cadwalader, Wickersham & Taft LLP

Tax Court Calls Bluff on Hedge Fund’s Basket Option Contracts

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The Tax Court recently held that a hedge fund’s basket option contracts were in substance tax ownership of the underlying basket securities. The hedge fund, through its affiliated entities, entered into 10 basket option...more

Seward & Kissel LLP

Carried Interest in the Crosshairs…Again

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On February 6, 2025, Democratic Senators and Representatives proposed the Carried Interest Fairness Act, which would treat carried interest as ordinary income. Additionally, on the same day President Trump met with...more

Foley & Lardner LLP

Tax Court Reaffirms Soroban Holding that “Active” Limited Partners are Subject to Self-Employment Tax

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On December 23, 2024, the Tax Court ruled in Denham Capital Management LP v. Commissioner (T.C. Memo. 2024-114), that limited partners that actively participated in the activities of a fund manager formed as a state law...more

Morgan Lewis

Taxpayer Victory in US Tax Court Highlights Need for Properly Structuring Partnership Profits Interests

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A recent US Tax Court case upholds profits interest treatment for a taxpayer’s receipt of a partnership interest granted in exchange for services. The case highlights how properly structuring and documenting the grant of a...more

McDermott Will & Schulte

The Benefits of Investing in a QOF

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Since coming into effect in January 2018, Subchapter Z of the US Tax Code—also known as the opportunity zone provisions—has enabled investors to pour billions of dollars into a broad array of businesses, from real estate...more

Akin Gump Strauss Hauer & Feld LLP

Upper Tribunal Overturns Decision on Tax Treatment of Management Fee Rebates

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The Upper Tribunal (UT) has found that amounts paid by Hargreaves Lansdown (HL) (an investment platform service provider) to its customers, which represented rebates received from investment fund managers, were “annual...more

Orrick, Herrington & Sutcliffe LLP

New Countries Eligible for Italy's White List

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In the Official Gazette No. 195 of 22 August 2016, the Italian Government published the Ministerial Decree of 9 August 2016 (the "Decree") that amended the list of countries and territories "allowing an adequate exchange of...more

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