IRS Restricts Carried Interest Tax Break Used by Hedge Funds
- Regulations prohibit using workaround to get tax benefits
- Rules address a mistake embedded in 2017 Republican tax law
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The Internal Revenue Service released regulations to restrict a valuable tax break that hedge fund managers were able to claim after an error in 2017 Republican tax law.
The change, published Friday, bars money managers from using some types of business entities, including S corporations and passive foreign investment companies, to take advantage of an exemption to rules for taxing carried interest.