US Tax Matters

Tax considerations are integral to all areas of our practice. We advise clients in two critical ways: how to achieve optimal tax efficiencies in pursuing their investment objectives and how to comply with ever-changing U.S. tax and reporting requirements.

Fundamental to our practice is our thorough-going familiarity with the tax structuring options for hedge, private equity, venture capital, loan and credit opportunity, real estate and other specialty funds, including the use of AIVs, “blockers” and feeder or parallel investment vehicles. We do not rely on a one-size-fits-all model LPA or stock PPM disclosure, but instead tailor distribution and capital account allocation provisions and tax disclosures in a way that best suits the particular fund and client’s objectives. We also advise on the U.S. tax treatment of specific investments and activities, including debt and equity instruments, trading and derivatives, loan origination, credit and securitization transactions, oil and gas interests, real estate (“FIRPTA”) assets, litigation finance, PTPs, and foreign investments (e.g., “PFICs” and “CFCs”).

Another core element of our tax practice is advising investment managers and their teams regarding “upper tier” arrangements, including tax structure, seeding transactions, carried interest and revenue sharing, issuing profits interests and deferred compensation, and complying with Section 409A and 457A regulations.

Recently, there have been major changes to the tax laws that substantially affect our clients, including numerous aspects of the Tax Cuts and Jobs Act of 2017, the partnership tax audit rules enacted as part of the Bipartisan Budget Act of 2015, dividend equivalent withholding tax rules (Section 871(m)) and cross-border information reporting rules (FATCA and CRS regimes). We are committed to keeping our clients fully informed about all the latest developments in tax rules and regulations that so often can translate into material enhancements in their investment returns.

Click here for examples of our tax advice to clients.
  • Draft and negotiate tax provisions of fund agreements, subscription agreements and side letters, both from the fund side and the investor side
  • Advise managers and investors regarding UBTI and ECI issues
  • Advise non-U.S. funds and investors on cross-border withholding, tax treaty and foreign government (Section 892) and pension fund tax issues
  • Draft and negotiate tax provisions of purchase and sale agreements, joint ventures, and credit agreements
  • Negotiate tax provisions of ISDAs and other derivative documentation, repos, prime broker and other trading agreements
  • Advise regarding changes in U.S. tax laws, including the recently enacted TCJA legislation and BBA tax audit rules