Saturday, 23 August 2014
Last updated 18 hours ago
Apr 2 2013 | 10:29am ET
As the alternative investment industry girds for another fight over taxation of carried interest, a little-known new tax has already begun to eat into those profits.
President Barack Obama's 2010 healthcare overhaul included a new levy, the net investment income tax, which will take 3.8% of "unearned investment income" from the highest-earning taxpayers. And, according to a new white paper from law firm Hirschler Fleischer, the new tax is targeted specifically at hedge fund managers and gives them little opportunity to avoid it.
The NII, which took effect at the beginning of the year, taxes income from "trading in financial instruments."
Private equity fund managers, according to Hirschler Fleischer, may be able to avoid the levy, but only if they can demonstrate that their investments aren't passive. That could be hard: Federal tax law requires some 500 hours of work annually personally performing services for a business to shed the passive tag.
Aug 4 2014 | 7:42am ET
By now, U.S. and international subscribers have received their home or office delivery of the special 500th issue of Futures magazine. You can too!—a very special offer follows. The issue is the largest in years—filled with the best trading strategies and stories from 43 years of being the primary publication for commodity, stock, options and forex traders. Read more…
The July/August 2014 issue is our largest in years—filled with the best trading strategies and stories from 43 years of being the primary publication for commodity, stock, options and forex traders.
The Alpha Pages Editor's Note