Terminology
Who manages the fund?
The General Partner (GP)
Lifespan of PE structure
7-9 Years
What is question 3B on Schedule B of 1065?
Partnerships the fund owned directly 20% or more, or own, directly or indirectly, 50% or more, of total voting power
What is PartnerSight used for?
What is GoSystem used for?
PS
- K-1s, K-2, K-3, Federal Review Workbook
GS
- 1065 and 1120/ Transmitting everything to IRS
What information should be requested when a transfer of capital occurs?
- W-8/W-9
- Partner Information
- Transfer Documents
- Subscription Documents
What does LPA stand for?
Name two basic informational items found here.
Limited Partnership Agreement
- GP
- Date organized
- Allocation methodology
Why do private equity funds often use “blocker corporations”?
Block income flowing to Tax Exempt or Tax Sensitive investors
What triggers a 1042/1042-S Filing?
- Foreign investors
- FDAP income (Interest Income & Dividend Income)
What administrative tasks do you take when a structure launches a new fund?
- Create MDM
- Create iManage Folders
- Create Workstream
- Add them to PartnerSight and GoSystem
Name two criteria required when filing a Schedule M-3?
1. Total Assets >= 10 million
2. Adjusted total assets for the tax year>= 10 million
3. The amount of total receipts for the tax year is equal to $35 million or more
4. An entity that is a reportable entity partner with respect to the partnership owns or is deemed to own, directly or indirectly, an interest of 50% or more in the partnership's capital, profit, or loss on any day during the tax year of the partnership.
What is carried interest?
The share of investment profits that private equity (PE) and hedge fund managers receive as compensation for managing a fund—typically 20% of the fund’s profits, after investors (limited partners) have earned a minimum return.
Which of the following is considered unrelated business taxable income (UBTI) for tax-exempt investors?
A) Income from debt leveraged investments in partnerships
B) Dividends from portfolio companies
C) Interest income from portfolio companies
A) Income from debt leveraged investments in partnerships
What triggers a 8804/8805 Filing?
- Foreign investors
- Effectively Connected Taxable Income / Effectively Connected Income US
Which software does an XML need to be reviewed before transmitting returns?
GoSystem
The steps for creating SOW (From The Beginning)
Hint : 5 Steps
- Fees/budget
- CLEAR
- Contract Express
- Docusign
- Save to 130 Folder (if not already)
What is the primary purpose of the “catch-up” provision in a waterfall structure?
What is the tax treatment for distribution in excess of basis?
Capital Gain
What forms are filed with an administrative adjustment request?
Hint: 3 Forms
1065X
8082
8985/8986
Where can you find the list of all extended properties?
What is the extended property for the following K-3 line item:
"Form 1116 or 1118 - Foreign Taxes - Foreign tax redeterminations - Passive category income Foreign"
Populated Form production Dataset
Is contested tax?:Yes
Is contested tax?:No
What is the general tax rule for organizational cost deduction limitations?
Allowed $5,000 to be immediately deducted in the first year.
Remaining will be amortized over 15 years (180 Months)
What type of income is exempt from Section 1061 treatment?
Long Term Capital Gain derived from a capital interest (Non-API)
What type of Private Equity fund is an open ended investment vehicle?
Evergreen Fund
What form do you report Section 1202 Gain Exclusion (Qualified Small Business Stock) on a tax return?
Form 8949 Part 2 and include the applicable adjustment code
What is the purpose of the K-1 tracker in Tax Portal?
Tracks underlying external K-1s uploaded by the client.
Under the new OBBBA legislation, what adjustments were reinstated in the calculation of adjusted taxable income?
Depreciation, Amortization, Depletion (EBITDA)