Abstract

https://ssrn.com/abstract=2524593
 


 



A Compendium of Private Equity Tax Games


Gregg D. Polsky


University of Georgia Law School

November 14, 2014

UNC Legal Studies Research Paper No. 2524593

Abstract:     
This paper will describe and analyze tax strategies, lawful and unlawful, used by private equity firms to minimize taxes. While one strategy — the use of “carried interest” — should by now be well understood by tax practitioners and academics, the others remain far more obscure. In combination, these strategies allow private equity managers to pay preferential tax rates on all of their risky pay (through carried interest), pay preferential tax rates on much of their non-risky pay (through management fee waivers and misallocations of their expense deductions), and push much of the residual non-risky pay down to their funds’ portfolio companies who, unlike the fund, can derive significant tax benefits from the resulting deductions (through monitoring fees and management fee offsets).

Number of Pages in PDF File: 18

Keywords: tax, private equity, carried interest, management fee waiver, monitoring fees, management fee offset


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Date posted: November 16, 2014  

Suggested Citation

Polsky, Gregg D., A Compendium of Private Equity Tax Games (November 14, 2014). UNC Legal Studies Research Paper No. 2524593. Available at SSRN: https://ssrn.com/abstract=2524593 or http://dx.doi.org/10.2139/ssrn.2524593

Contact Information

Gregg D. Polsky (Contact Author)
University of Georgia Law School ( email )
225 Herty Drive
Athens, GA 30602
United States

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