Tax Planning For U.S. Hedge and Equity Funds

Tax Planning For U.S. Hedge and Equity Funds
FAS CPA & Consultants

Service Details

Your master and feeder funds will benefit from the creation of a tax plan that includes an exempt offshore fund to protect foreign investors and reduce their taxes.

Structuring of Funds

Funds typical structure is design as a master fund structure. This is the cornerstone to protect investors and create a classification for U.S., foreign and non-profit clients. The master fund will be divided into a U.S. Feeder Fund and a Foreign Feeder Fund. Within the same structure the investment manager is also a foreign entity. There are many offshore jurisdictions such as Cayman, Bermuda or Bahamas that can be used as the base for the foreign feeder fund and the investment manager. Cayman is usually the location of choice for many reasons, including its proximity to the U.S. and its legislation in addition to be a first tier offshore center.

Tax Planning

The complexity of operational challenges and internal structuring result in the need for tax planning for:

Cash flow distributions
Valuation
Distribution
Diversification
Transfers
Finally, fund managers should consider changes to the fund structure as the result of important tax changes:
Carried interest: if a partnership interest is sold before 3 years the sale is taxable at regular tax rates.

Tax Changes

Itemized deduction: management fees are not tax deductible anymore until 2025. 20% Business income deduction: fund partners are allowed 20% income deduction subject to W2 wages paid. Business loss limitation: fund partners losses are limited to $250K if single, double if married. Any excess will be carried forward. Controlling Foreign Corporation (CFC): income from CFC is taxable and should be included into partners personal tax return subpart F.

Subscription Plans

Silver

$900

/ Per Month

Gold

$1.5K

/ Per Month

Accounting Services Up To 6 Bank Accounts
6 Bank & Credit Card Accounts Reconciliation
Monthly Classification of Transactions
Month-end Closing
Tax Return Filing Up To 15 K1s
External Payroll Registration

Platinum

$3K

/ Per Month

Accounting Services Up To 6 Bank Accounts
6 Bank & Credit Card Accounts Reconciliation
Monthly Classification of Transactions
Month-end Closing
Tax Return Filing Up To 20 K1s
External Payroll Registration
Annual Audit Report

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Accounting Firm providing Accounting & Bookkeeping, Tax Planning and Offshore Strategies to grow your business and protect your assets.

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Accounting Firm providing Accounting & Bookkeeping, Tax Planning and Offshore Strategies to grow your business and protect your assets.

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