Mixing Management Fee Waivers with Mayo
University of Iowa - College of Law
October 1, 2013
Florida Tax Review, Vol 15, 2014, Forthcoming
U Iowa Legal Studies Research Paper No. 13-37
This Article examines whether the management fee waiver strategy used by private equity firms to convert ordinary income into long-term capital gains actually works. Scholars have almost uniformly condemned the strategy, calling it "extremely aggressive," "profoundly piggish," or illegal. However, this Article shows that the critics substantially overstate their case (the provision of law most frequently cited by the critics doesn't even exist), especially in light of the changes in the tax-administrative law landscape wrought by Mayo v. United States.
Number of Pages in PDF File: 52
Keywords: private equity, 707, Mayo, fee waivers, profits interests, phantom regulations, guaranteed payments, Pratt, BainAccepted Paper Series
Date posted: October 1, 2013 ; Last revised: December 10, 2013
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