IRS Seeks to Close Hedge-Fund Tax Loophole for Carried Interest
- Authorities issue guidance on exemption to new rules
- Says S corporations will be subject to holding period
Photographer: Simon Dawson/Bloomberg
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The U.S. Department of Treasury and the Internal Revenue Service issued guidance seeking to close a loophole that hedge-fund managers had been trying to exploit to avoid paying higher taxes on carried-interest profits.
The guidance informs taxpayers that regulations will be issued barring money managers from using S corporations to take advantage of an exemption to new rules for carried interest contained in President Donald Trump’s tax legislation, according to a statement Thursday.