Tax Treatment of Carried Interests and Similar Interests under I.R.C. section 1061

Investment fund managers often receive "carried interests" (a share of the fund's profits) in exchange for their services managing the fund. Prior to the 2017 tax act, income with respect to these interests was generally taxed as a long-term capital gain, eligible for a lower tax rate than other income.

However, the 2017 tax legislation enacted I.R.C. section 1061, which limits the tax preference for certain carried interests and similar interests. Recently proposed regulations set forth the scope and mechanics of section 1061. This program, taught by Aaron Gaynor of Roberts & Holland, will cover what interests are generally affected by section 1061, the consequences of the application of that section, and relevant exceptions. Additionally, the program will cover other tax provisions that are foundational or collateral to section 1061.

Learning Objectives:

1. Identify circumstances where section 1061 applies
2. Discuss the consequences of the application of section 1061
3. Review tax concepts foundational and collateral to section 1061