The Myth of the Carried Interest Loophole

The Myth of the Carried Interest Loophole

Are hedge funds getting away with not paying taxes for years? Many pundits and politicians claim the carried interest "loophole" creates an unfair advantage for the wealthy and that something must be done about this crisis. But what is the carried interest loophole? Does it actually exist? In this video, tax Attorney Anthony Parent explains how equity and wealth fund managers are compensated and explains how they are bound by the same rules everyone else is when it comes to long term capital gains. There is no special carve out for hedge funds. It's simple partnership taxation of long term capital gains. Yeah, kind of boring. In fact, "carried interest" is a made up term to describe a made up thing. There is no way to close the carried interest loophole because there is no carried interest loophole! Rather, the claimed societal pathology isn't all the sinister --- it is merely long term capital gains tax treatment which states you are taxed at 20% rate on the date of disposition. This is true whether you are an investor in a 3-family house or a multi-billion dollar fund. Parent & Parent LLP 144 South Main Street Wallingford, CT 06492 (203) 269-6699 http://ift.tt/1RfwK1f https://youtu.be/y_DHWFNc1rE IRS Medic