The Value of Carried Interest

Private Wealth Services attorney Brent Berselli co-authored an article for STEP Journal on the role of carried interest in estate planning for U.S. fund managers. Carried interest refers to the profits interest that a private fund's general partner (GP) receives after meeting specific performance thresholds; for example, a GP for a private equity fund may receive a certain percentage of the fund's distributable profits if investors are paid an annual return of a certain percent. In his article, Mr. Berselli covers the tax planning and structuring considerations that carried interest raises, particularly given failed attempts to reclassify its capital gains status as ordinary income. He also talks about valuation and federal tax compliance, imparting guidance for estate planning professionals to develop tax-efficient wealth management plans that preserve client and business interests while avoiding costly penalties or pitfalls.

READ: The Value of Carried Interest (Subscription required)