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New Hedge-Fund Tax Dodge Triggers Wild Rush Back Into Delaware

  • Firms set up LLCs in plan to avoid carried-interest change
  • Congress may have stumbled in narrowing loophole for managers
U.S. President Donald Trump with the tax-overhaul bill after singing it into law.

U.S. President Donald Trump with the tax-overhaul bill after singing it into law.

Photographer: Mike Theiler/UPI

Wall Street’s fast-money crowd is returning to well-trodden ground to elude Trump-era tax laws: Delaware.

Since late 2017, hedge fund managers have created numerous shell companies in the First State, corporate America’s favorite tax jurisdiction. These limited liability companies share a common goal: dodging new tax rules for carried-interest profits through a bit of deft legal paperwork.