Mixing Management Fee Waivers with Mayo

Andy Grewal

University of Iowa - College of Law

October 1, 2013

16 Fla. Tax. Rev. 1
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: 53

Keywords: private equity, 707, Mayo, fee waivers, profits interests, phantom regulations, guaranteed payments, Pratt, Bain

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Date posted: October 1, 2013 ; Last revised: May 22, 2014

Suggested Citation

Grewal, Andy, Mixing Management Fee Waivers with Mayo (October 1, 2013). 16 Fla. Tax. Rev. 1; U Iowa Legal Studies Research Paper No. 13-37. Available at SSRN: http://ssrn.com/abstract=2333213

Contact Information

Amandeep S. Grewal (Contact Author)
University of Iowa - College of Law ( email )
Melrose and Byington
Iowa City, IA 52242
United States
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