Fund managers may be required to file Treasury International Capital (“TIC”) Form SHL, Report of Foreign-Residents’ Holdings of U.S. Securities, Including Selected Money Market Instruments (SHL (2024)) by August 30, 2024, based on the fair value (determined as of June 28, 2024) of certain U.S. securities issued to foreign persons. This client alert focuses on…
NEIL A. DUBNOFF
PARTNER
Neil Dubnoff focuses his practice on the tax aspects of onshore and offshore investment funds and their investment managers. His clients include investment managers with multiple billions of assets under management. Neil regularly advises on tax issues related to fund formation, operations and investments.
Practices
About
Neil’s experience also includes advising on corporate and partnership tax matters, including mergers and acquisitions, partnership transactions, real estate transactions, financings and securitizations, as well as tax controversy. Neil regularly advises private investment fund clients with respect to their offering documents and investments, capital markets and structured products. Neil has extensive experience counseling clients on Foreign Account Tax Compliance Act (FATCA) issues.
Neil was recognized as a New York Metro Rising Star by Super Lawyers from 2015-2017.
Education
Tulane University Law School (J.D., summa cum laude, 2005)
Tulane Law Review
Cornell University, College of Arts and Sciences, (B.A., 2000)
Bar Admissions
2006, New York
Accolades
Order of the Coif
Speaking Engagements
Year-End Tax Planning
Co-presenter, Kleinberg Kaplan Presents Private Funds: The Essential Series (Episode 2), November 2022
Private Equity Fund Formation: Choice of Entity, Fundraising Trends, SEC Regulatory Issues, Tax Concerns
Co-Speaker, Strafford Webinar, July 2022
Evolution of Hedge Fund Investing for U.S. Tax-Exempt Investors
Co-Speaker, Kleinberg Kaplan & Additive Advisory PBC Special Webinar, May 2022
Year-End Tax Planning for Hedge Funds, Private Equity Funds, Investment Partnerships, and Fund Managers
Co-Speaker, Strafford Webinar, November 2021
Tax Structuring Issues for Credit Funds
Co-Speaker, Private CFO/COO Seminar, March 2021
Drafting Joint Venture Agreements, including Keys to Structuring Real Estate and Construction Deals
Co-Presenter, American Law Institute Continuing Legal Education, January 2021
Publications
Advantages for U.S. Tax-Exempt Investors via Onshoring Investment in Hedge Funds and Use of Swap Transactions
Bloomberg BNA Tax Management Memorandum, February 2022
Hedge Funds – Tax Issues and Planning to Consider Before Year-End
Bloomberg BNA Daily Tax Report, December 2016
Insights
Certain Fund Managers May Be Required to File TIC Form SHL by August 30, 2024
August 7, 2024Client AlertsWhat Fund Managers Need to Know about the Recent Changes to the QPAM Exemption under ERISA
August 5, 2024Client AlertsThe U.S. Department of Labor (the “DOL”) recently amended the qualified professional asset manager (“QPAM”) exemption. The QPAM exemption is commonly relied on by fund managers that manage “plan assets” either through separately managed accounts or funds that exceed the 25% benefit plan investor test. If a manager is a QPAM, then certain transactions that…
Reminder: Approaching Deadline for Elections to Elect into New York State and New York City Pass-Through Entity Taxes for 2024
March 6, 2024Client AlertsThis alert is a reminder of the approaching deadlines and action items regarding the New York State Pass-Through Entity Tax (the “NYS PTET”) and the New York City Pass-Through Entity Tax (the “NYC PTET”). Deadline: March 15, 2024 The deadline to elect into the NYS PTET and the NYC PTET for 2024 is March 15,…
Mark-to-Market Election – Whether to Make or Revoke a Section 475(f) Election on or Before March 15, 2024
February 28, 2024Client AlertsEach year, we send a newsletter to our clients and friends regarding Section 475(f) mark-to-market elections. A 475(f) election must be made by partnerships before March 15th of the year in which the election is to be effective and can be overlooked while people are focused on preparing prior year tax returns and K-1 estimates.…
Limited Partner Exception to Self-Employment Tax – What to Do in Light of the Recent Soroban Case
January 10, 2024Client AlertsBackground on the Limited Partner Exception Section 1401 of the U.S. Internal Revenue Code of 1986, as amended (the “Code”), imposes self-employment tax on an individual’s self-employment income. Self-employment income is generally defined as the net earnings from self-employment, which is “the gross income derived by an individual from any trade or business carried on by…
Tax Issues and Planning to Consider Before and After Year-End 2023
December 21, 2023Client AlertsThis newsletter briefly highlights certain tax issues and planning that fund managers and high-net-worth individuals should consider (or reconsider) before and shortly after the end of 2023. There does not appear to be any proposed tax legislation that is expected to be enacted in the near-term, but that is always subject to change. There have…
Corporate Transparency Act Imposes Significant New FinCEN Reporting and Disclosure Requirements
December 5, 2023Client AlertsOn January 1, 2024, the Beneficial Ownership Information (“BOI”) reporting requirements under the federal Corporate Transparency Act (“CTA”) are scheduled to go into effect. The new rules represent a fundamental shift in the U.S. disclosure regime for privately held companies. The CTA A part of Congress’s historic bipartisan National Defense Authorization Act of 2021, the…
New York PTET Elections and Other Imminent Tax Deadlines
March 9, 2023Client AlertsNew York Pass-Through Entity Tax (“PTET”) Due Date for Elections The due date to make elections to pay the New York State and New York City PTET for 2023 is March 15, 2023. March 15, 2023, is also the due date to elect to pay the New York City PTET for 2022, but such election…
September 15, 2022, Deadline For The New York State Pass-Through Entity Tax Election for 2022 AND New York City Pass-Through Entity Tax Can Now Apply to 2022
September 1, 2022Client Alerts2022 New York State Pass-Through Entity Election Deadline The original deadline to make the New York State pass-through entity tax (“NYS PTET”) election for 2022 was March 15, 2022, but in May was extended to September 15, 2022. (Please click here for our May 2022 alert on the extension of the NYS PTET deadline.) An…
Tax Planning for Losses for Hedge Funds and Individuals
June 27, 2022Client AlertsThe stock and crypto markets are both significantly down from the beginning of 2022. Funds and other investors may have considerable realized and unrealized losses. Tax planning may help soften the economic impact. In this alert, we focus on tax planning for funds and individuals. The type of tax planning that may be available depends…
Update: 2022 Election Deadline for New York State Elective Pass-Through Entity Tax Extended to September 15, 2022
May 17, 2022Client AlertsNYS PTET Election Deadline for 2022 Extended to September 15, 2022 On May 6, 2022, Governor Hochul signed into law a bill that extends the New York State Pass-Through Entity Tax (the “NYS PTET”) election deadline for the 2022 tax year to September 15, 2022. Previously, the election deadline for 2022 was March 15, 2022.…
New York State Budget Enacts an Elective NYC Pass-Through Entity Tax
April 20, 2022Client AlertsOn April 9, 2022, Governor Hochul signed legislation which creates an elective NYC Pass-Through Entity Tax (the “NYC PTET”) that is very similar to the New York State Pass-Through Entity Tax (the “NYS PTET”). The NYC PTET allows certain partnerships and S corporations to elect to pay an entity level tax at a rate of…
Reminder: New York State Pass-Through Entity Tax
February 17, 2022Client AlertsThis newsletter serves as a reminder regarding several deadlines and action items regarding the New York State Pass-Through Entity Tax (the “NYS PTET”). March 15, 2022, Deadline The deadline to elect into the NYS PTET for 2022 is March 15, 2022. The election is made on an annual basis, so an election for 2022 will…
Certain Fund Managers May Be Required To File TIC Form SHC By March 4, 2022
February 11, 2022Client AlertsFund managers may be required to file Treasury International Capital (“TIC”) Form SHC, Report of U.S. Ownership of Foreign Securities, Including Selected Money Market Instruments (“Form SHC”), for 2021 by March 4, 2022, based on the fair value of foreign assets owned by U.S. persons determined as of December 31, 2021. For 2021 and other benchmark…
Mark-to-Market Election – Whether to Make or Revoke a Section 475(f) Election on or Before March 15, 2022
February 8, 2022Client AlertsEach year, we send an annual newsletter to our clients and friends regarding Section 475(f) mark-to-market elections. A 475(f) election must be made by partnerships early in the year (by March 15, 2022, for 2022) and can be overlooked while people are focused on preparing tax returns and K-1 estimates for the prior year. A…
Post Year-End Tax Issues and Planning to Consider
January 10, 2022Client AlertsThis tax alert briefly highlights certain tax issues and planning that hedge and private equity fund managers and high-net-worth individuals should consider (or reconsider) now that we are in the new year. Our 2021 year-end tax alert highlighted many items to consider and potential tax moves to take before year-end and highlighted proposed tax changes.…
Tax Issues and Planning to Consider Before Year-End 2021
December 7, 2021Client AlertsThis annual client alert briefly highlights certain tax issues and planning that hedge fund managers and high-net-worth individuals should consider (or reconsider) before the end of 2021. Although year-end tax planning is always important, the potential increase in tax rates in 2022 and other potential tax changes make it even more important this year-end. The…
Guidance Recently Issued on New York State’s New Elective Pass-Through Entity Tax
September 1, 2021Client AlertsTax Planning for Fund Managers and Other High-Net-Worth Individuals Earlier this year, New York State enacted a new elective pass-through entity tax (the “PTET”). The PTET generally allows individuals who are members of pass-through entities to effectively receive a federal deduction for New York State income taxes that they would otherwise not be able to deduct. On…
Kleinberg Kaplan Advises Absoluto Partners in its Investment in Brazil-based Nubank
June 15, 2021Firm NewsKleinberg Kaplan client, Absoluto Partners, a Brazil-based hedge and venture capital fund manager with headquarters in Rio de Janeiro, recently participated in a Series G fundraising round totaling $750 million for Nubank, a Brazil-based fintech company. Absoluto Partners, Verde Asset Management and Sands Capital invested $250 million, while Berkshire Hathaway invested $500 million. According to The…
Mark-to-Market Election – Whether to Make or Revoke a Section 475(f) Election on or Before March 15, 2021
March 4, 2021Client AlertsEach year, we send an annual newsletter to our clients and friends regarding Section 475(f) mark-to-market elections. A 475(f) election must be made by partnerships early in the year (by March 15, 2021, for 2021) and can be overlooked while people are focused on preparing tax returns for the prior year. A 475(f) election generally…
Tax Issues and Planning to Consider Before Year-End 2020
November 10, 2020Client AlertsNovember 2020 This annual newsletter briefly highlights certain tax issues and planning that hedge fund managers (and other high-net-worth individuals) should consider (or reconsider) before year-end. Although year-end tax planning is always important, the potential increase in tax rates in 2021 makes it even more important this year-end. The election may be over, but uncertainty…
The Impact on Fund Investors and Fund Managers of the New Regulations on the Business Interest Expense Limitation under Section 163(j)
August 25, 2020Client AlertsThe Tax Cuts and Jobs Act (the “TCJA”), enacted on December 22, 2017, made significant changes to Section 163(j) of the Internal Revenue Code of 1986, as amended (the “Code”), regarding the deductibility of business interest expense. For tax years 2018 through 2025, Section 163(j) of the Code generally limits a taxpayer’s business interest expense…
Potential Tax Refunds If SCOTUS Rules That Affordable Care Act Is Unconstitutional
July 13, 2020Client AlertsJuly 15, 2020 Deadline for 2016 Protective Refund Claims for Taxpayers that Did Not Go on Extension For 2016 July 2020 In December 2019, the 5th Circuit Court of Appeals ruled that the individual mandate portion of the Affordable Care Act (the “ACA”) was unconstitutional. The Supreme Court of the United States (the “SCOTUS”) has agreed to…
A Tax Planning “Hat Trick” for Funds Acquiring Portfolio Company Debt
July 9, 2020Client AlertsAs a result of the COVID-19 pandemic, many companies are having difficulty meeting payment obligations on their outstanding debt. However, thanks to a combination of the U.S.-Irish income tax treaty and Section 108 of the Internal Revenue Code of 1986, as amended (the “Code”), private equity funds (and other funds) may be able to find…
More Global High-Wealth Audits Expected Soon
June 22, 2020Client AlertsThe Commissioner of the IRS Large Business and International Division recently announced that the Global High Wealth Industry Group of the IRS will initiate several hundred audits of high-wealth individuals. The audits are expected to commence beginning July 15 when the suspension of certain examination and collection functions of the IRS is lifted. A representative…
Kleinberg Kaplan represents Mittleman in its completed merger with Aimia
June 22, 2020Firm NewsKleinberg Kaplan is pleased to have represented Mittleman Brothers, LLC in its completed merger with Aimia Inc. (AIM). This represents another in a recent string of Canadian public company transactions and activism engagements handled by our firm. Kleinberg Kaplan attorneys advising Mittleman included partners Christopher P. Davis and Eric Wagner and associate Alex Shiekman (Corporate), partner…
Unexpected Tax Consequences of Commercial Lease Modifications
April 30, 2020Client AlertsIn a prior Kleinberg Kaplan client alert, we noted that COVID-19 related economic disruptions have caused both landlords and tenants to consider restructuring their commercial lease arrangements. Tenants that enter into discussions with landlords seeking rent relief may be successful. However, landlords and tenants should be aware that they could run into unexpected tax consequences in…
Summary of Key Tax Provisions for Individuals and Businesses under the CARES Act
March 30, 2020Client AlertsThe Coronavirus Aid, Relief, and Economic Security Act ( the “CARES Act”) was signed into law on Friday, March 27, 2020. The CARES Act contains a number of tax provisions which modify the Internal Revenue Code of 1986, as amended (the “Code”). The provisions are designed to provide relief and assistance to both individuals and…
Mark-to-Market Election – Whether to Make or Revoke a Section 475(f) Election on or Before March 16, 2020
March 2, 2020Each year, we send an annual newsletter to our clients and friends on Section 475(f) mark-to-market elections. A 475(f) election must be made by partnerships early in the year (by March 16, 2020 for 2020) and can be overlooked while people are focused on preparing tax returns for the prior year. In a year like…
Hedge Funds – Tax Issues and Planning to Consider Before Year-End 2019
December 17, 2019Client AlertsYear-end has always been a time for tax planning and we send our clients and friends our year-end tax planning newsletter on an annual basis. Similar to the end of 2018, there does not appear to be significant tax legislation on the horizon. Also, there are still many unanswered questions regarding the 2017 Tax Cuts…
Certain Fund Managers May Be Required To File TIC Form SHL By August 30, 2019
August 21, 2019Client Alerts, FEATURED PUBLICATIONFund managers may be required to file Treasury International Capital (“TIC”) Form SHL, Report of Foreign-Residents’ Holdings of U.S. Securities, Including Selected Money Market Instruments (SHL (2019)) by August 30, 2019, based on the fair value of certain U.S. securities determined as of June 28, 2019, issued to foreign persons. This newsletter focuses on the…
Proposed Regulations May Substantially Mitigate CFC Tax Issues for Funds – Certain Funds May Want to Issue Amended 2018 K-1s
June 20, 2019Client Alerts, FEATURED PUBLICATIONThe Internal Revenue Service issued proposed regulations on Friday, June 14th, addressing various aspects of the controlled foreign corporation (“CFC”) rules, including with respect to global intangible low-taxed income (“GILTI”) and, significantly, who is a 10% or more shareholder for inclusion purposes regarding subpart F income and GILTI income. Among other things, the proposed regulations…
Mark-to-Market Election – Whether to Make or Revoke a Section 475(f) Election on or Before March 15, 2019
March 11, 2019Client Alerts, FEATURED PUBLICATIONSection 475(f) of the Internal Revenue Code of 1986, as amended, provides that a trader in securities or commodities can make elections to “mark-to-market” their securities and/or commodities and treat increases or decreases in value as ordinary. A fund must be a trader, and not an investor, in order to be able to make a…
Tax Planning for Losses
December 26, 2018Client Alerts, FEATURED PUBLICATIONThis newsletter is a brief follow-up to our recent year-end tax newsletter. Click here for our year-end newsletter. Since our 2018 year-end newsletter was distributed, the stock market has been very volatile and decreased significantly (although the market was up a lot today, December 26th, fortunately). Many funds may have significant unrealized losses. This newsletter…
Hedge Funds – Tax Issues and Planning to Consider Before Year-End
December 5, 2018Client AlertsYear-end has always been a time for tax planning and we send our clients and friends our year-end tax planning newsletter on an annual basis. Unlike the end of 2017, there does not appear to be significant tax legislation on the horizon, although there still could be some changes enacted in 2019, including some potential…
So You Manage a Fund? Watch Out for the Excess Business Loss Rules!
October 18, 2018Client Alerts, FEATURED PUBLICATIONFollowing tax reform, there is a restriction on the deductibility of business expenses. Under the new “excess business loss” rules, trade or business expenses are not deductible to the extent they exceed trade or business income. (Provided that taxpayers filing joint returns are allowed to deduct up to $500,000 of such excess expenses, and other…
Potential One-Time Opportunity Today For Federally Deductible Charitable Contribution With A Credit Against State And Local Taxes -Check Must Be Mailed Today, August 27th-
August 27, 2018Client AlertsThe Internal Revenue Service and Treasury issued proposed regulations on August 23rd which are proposed to be effective beginning tomorrow, August 28th. As such, the proposed regulations offer a potential opportunity, which expires today, August 27th, in which to make contributions to a state charitable fund to potentially receive a charitable deduction for federal tax…
Hedge Fund Managers No Longer Need To Worry About the DOL Advice Fiduciary Rule
July 27, 2018Client Alerts, FEATURED PUBLICATIONOn June 21, 2018, the United States Court of Appeals for the Fifth Circuit issued a mandate that officially vacated the Department of Labor’s advice fiduciary rule, which generally had gone into effect for investments made on or after June 9, 2017. For discussion of the Fifth Circuit’s March 15th, 2018, decision to vacate the…
New Connecticut Tax on Pass-Through Entities — Impact on Hedge Funds and Hedge Fund Managers
June 12, 2018Client Alerts, FEATURED PUBLICATIONOn May 31, 2018, Connecticut enacted the “Act Concerning Connecticut’s Response to Federal Tax Reform”. Among other things, the Act imposes a 6.99% tax on certain pass-through entities (which, prior to the Act, were not subject to any Connecticut entity-level income tax). This tax may have significant implications for fund managers and other businesses with…
Cayman AEOI Portal Going Offline June 1; Reporting Deadline Effectively Extended to July 31
May 30, 2018Client Alerts, FEATURED PUBLICATIONThe Cayman Islands Department for International Tax Cooperation (“DITC”) has announced that the Cayman AEOI Portal (for Common Reporting Standard (“CRS”) and US FATCA reporting) will be taken offline on Friday, June 1, 2018, at 12:00 noon. The statutory deadline for 2017 CRS and US FATCA reports remains May 31, 2018. The DITC intends for…
Fifth Circuit Court of Appeals Vacates the DOL’s ERISA Advice Fiduciary Rule
March 20, 2018Client Alerts, FEATURED PUBLICATIONOn March 15, 2018, in a two-to-one decision, the United States Court of Appeals for the 5th Circuit overturned a district court decision and vacated the Department of Labor’s ERISA advice fiduciary rule, which had gone into effect in June 2017. For our prior newsletter on the DOL’s advice fiduciary rule, please click here. The…
Mark-to-Market Election
March 13, 2018Client Alerts, FEATURED PUBLICATIONSection 475(f) of the Internal Revenue Code of 1986, as amended, provides that a trader in securities or commodities can make elections to “mark-to-market” their securities and/or commodities and treat increases or decreases in value as ordinary. A fund must be a trader, and not an investor, in order to be able to make a…
Carried Interest Taxation – IRS Issues Notice 2018-18 Stating it Intends to Issue Regulations that “Corporation” does not include an S Corporation
March 1, 2018Client Alerts, FEATURED PUBLICATIONOn March 1, 2018, Notice 2018-18 was released, announcing that the Department of the Treasury and the Internal Revenue Service (the “IRS”) intend to issue regulations providing guidance on the application of Section 1061 of the Internal Revenue Code, which relates to the taxation of carried interest. The Notice further announced that the regulations will…
Carried Interest Planning Under the New Tax Legislation
December 21, 2017Client Alerts, FEATURED PUBLICATION–Year-end planning should be Considered– The tax legislation, which passed Congress and is expected to be signed by the President shortly, includes a new section of the Internal Revenue Code which is entitled “Partnership Interests Held in Connection with Performance of Services.” This section (Section 1061) changes the taxation of “carried interests” in certain circumstances,…
Hedge Funds – Tax Issues and Planning to Consider Before Year-End
December 15, 2017Client Alerts, FEATURED PUBLICATIONYear-end has always been a time for tax planning and we send our clients our year-end tax planning newsletter on an annual basis. Tax planning for this year-end, however, is even more important (and more complex and more uncertain) because of the proposed tax changes. The proposed tax legislation is extremely complex and introduces new…
Important CRS Deadline and FFI Agreement Renewal Notices
June 22, 2017Client Alerts, FEATURED PUBLICATIONReminder: Upcoming Deadline for the Common Reporting Standard As indicated in our newsletter sent on June 9th, the deadline for Common Reporting Standard (CRS) notification is Friday, June 30, 2017. Any Cayman Islands funds that have not completed the required notification on the Cayman Islands AEOI Portal must do so by Friday, June 30, 2017.…
FATCA and Common Reporting Standard Upcoming Deadlines and New Requirements
June 9, 2017Client Alerts, FEATURED PUBLICATIONUpcoming Deadlines for Cayman Islands Funds (Including Cayman Master Funds) June 30, 2017 Notification: U.S. FATCA and Common Reporting Standard U.S. FATCA notification to the Cayman Islands Tax Information Authority (the “Cayman TIA”) is required for entities that have not previously notified the Cayman TIA and entities that need to update an existing notification (for…
The Department of Labor’s New Regulations Defining Advice Fiduciary
May 26, 2017Client Alerts, FEATURED PUBLICATIONWhat Hedge Fund Managers Should Do Now In April 2016, the Department of Labor (“DOL”) released regulations that expanded the definition of an “advice fiduciary” with respect to plans covered by the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), and IRAs and other plans covered by Section 4975 of the Internal Revenue…
The Department of Labor Officially Delays the New Fiduciary Rule from April 10, 2017, to June 9, 2017
April 14, 2017Client Alerts, FEATURED PUBLICATIONOn April 7, 2017, the Department of Labor officially delayed, until June 9, 2017, the applicability date of regulations that would change the definition of an “advice fiduciary” for plans covered by the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), or Section 4975 of the Internal Revenue Code of 1986, as amended.…
The Department of Labor Has Proposed Delaying the New Fiduciary Rule for Sixty Days from April 10, 2017, to June 9, 2017
March 9, 2017Client Alerts, FEATURED PUBLICATIONIn April 2016, the Department of Labor (“DOL”) released regulations that, among other things, modify the definition of an “advice fiduciary” for plans covered by the Employee Retirement Income Security Act of 1974, as amended (“ERISA”). The new definition also applies to IRAs and other non-ERISA plans which are subject to Section 4975 of the…
Certain Fund Managers May Be Required To File TIC Form SHC By March 3, 2017
February 22, 2017Client Alerts, FEATURED PUBLICATIONFund managers may be required to file Treasury International Capital (“TIC”) Form SHC, Report of U.S. Ownership of Foreign Securities, Including Selected Money Market Instruments for 2016 by March 3, 2017, based on the fair value of foreign assets determined as of December 31, 2016. Form SHC is a Treasury form which seeks to gather…
Section 475(f) Mark-to-Market Election
February 16, 2017Client Alerts, FEATURED PUBLICATIONA Section 475(f) election might be beneficial for a fund experiencing losses in 2017 or possibly where a fund has significant net unrealized losses coming into 2017. Not as well known is that a section 475(f) election might also be beneficial where a fund is experiencing gains or has significant unrealized net gains coming into…
Hedge Funds—Tax Issues and Planning to Consider Before Year-End
December 6, 2016Attorney ArticlesHedge Funds – Tax Issues and Planning to Consider Before Year-End
November 21, 2016Client Alerts, FEATURED PUBLICATIONThis newsletter briefly highlights certain tax issues and planning that hedge fund managers should consider (or reconsider) before year-end. 1. Trump Presidency. With the election of Donald Trump as President, year-end tax planning is “business as usual” – that is, generally accelerating deductions and deferring income since rates are not expected to increase in 2017.…
Broader U.S. Withholding on Dividend Equivalent Amounts is Effective Beginning on January 1, 2017, for Agreements Entered Into On or After Such Date
November 18, 2016Client Alerts, FEATURED PUBLICATIONIn General Section 871(m) of the U.S. Internal Revenue Code of 1986, as amended, was enacted in 2010 and imposes a 30% U.S. withholding tax (subject to reduction by an applicable tax treaty) on dividend equivalent amounts paid (or deemed paid) on certain swaps and equity linked instruments referencing U.S. equities if the long party…
Foreign Bank Account Reports (FBARs)
May 31, 2016Client Alerts, FEATURED PUBLICATIONOVERVIEW This newsletter serves as our annual reminder of the requirement to file Reports of Foreign Bank and Financial Accounts (“FBARs”) where applicable. For calendar year 2015, FBARs are required to be filed on or before June 30, 2016. The form (which was known as Form TD F 90-22.1 before 2015) is known as FinCEN…
U.S. FATCA, U.K. FATCA and CRS – Upcoming Deadlines and Revised Self-Certification Form
May 10, 2016Client Alerts, FEATURED PUBLICATIONUpcoming Deadlines for Cayman Islands Funds (Including Cayman Master Funds) June 10, 2016, Notification: (extended from April 30, 2016) U.S. FATCA and U.K. FATCA Cayman Notification A Cayman fund (including a Cayman master fund) is required to notify the Cayman Islands Tax Information Authority (“TIA”) (via the Cayman portal) that it is a reporting financial…
Proposed 2017 Budget Would Eliminate Self-Employment Tax Exception Utilized by Managers
February 10, 2016Client Alerts, FEATURED PUBLICATIONSelf-employment tax is imposed on individuals’ trade or business income. Net investment income tax (“NIIT”) generally applies to high-income individuals’ investment income. Both taxes generally apply to income earned directly or through flow-through entities, and for most fund managers are applied at a marginal rate of 3.8% (although the self-employment tax has a lower effective…
Section 475(f) Mark-to-Market Elections
February 8, 2016Client Alerts, FEATURED PUBLICATIONA Section 475(f) election might help ease the pain for taxable investors in a fund experiencing losses in 2016 or possibly where a fund has significant unrealized losses coming into 2016. Specifically, Section 475(f) provides that a trader in securities or commodities can make elections to “mark-to-market” their securities and/or commodities and treat increases or…
Congress Passes Extenders Bill Affecting REITs
December 21, 2015Client Alerts, FEATURED PUBLICATIONOn December 18, 2015, Congress passed the Protecting Americans from Tax Hikes Act of 2015 (“PATH”), the permanent “extenders” legislation. Included among the provisions are many potentially significant changes affecting REITs and foreign investment in U.S. real property through REITs. This newsletter highlights a few of the provisions. REIT Spinoffs Disallowed The extenders bill would…
Common Reporting Standard (“Global FATCA”) – New Self-Certification Forms
December 16, 2015Client Alerts, FEATURED PUBLICATIONThe Cayman Islands government just released new individual and entity self-certification forms, which were developed for purposes of compliance with U.S. FATCA, U.K. FATCA and the Common Reporting Standard (“CRS”). Under U.S. FATCA and U.K. FATCA, Cayman funds are required to identify investors that are “specified U.S. persons” or “specified U.K. persons” and to report…
The Impact of the New Partnership Audit Rules on Hedge Funds and Private Equity Funds
December 1, 2015Client Alerts, FEATURED PUBLICATIONOn November 2, 2015, new partnership audit rules were enacted as part of The Bipartisan Budget Act of 2015. The new audit rules could have a significant impact on partnerships generally and on investment partnerships in particular. The new rules were enacted because the IRS and Congress felt that the current audit rules, referred to…
Hedge Funds – Tax Issues and Planning to Consider Before Year-End
November 18, 2015Client Alerts, FEATURED PUBLICATIONThis newsletter briefly highlights certain tax issues and planning that hedge fund managers should consider (or reconsider) before year-end. Tax rates are scheduled to remain the same in 2016. 1. Federal Income Tax Rates in 2015 and 2016. Long-term capital gains and qualified dividend income: 25%* Ordinary income: 44.6%* (*includes effect of net income investment tax and 3%…
BEA Form BE-180, 2014 Benchmark Survey For Financial Services Transactions, is due by November 1st (but extensions may be obtained)
October 20, 2015Client Alerts, FEATURED PUBLICATIONThe Bureau of Economic Analysis (BEA) Form BE-180, the 2014 Benchmark Survey of Financial Services Transactions Between U.S. Financial Services Providers and Foreign Persons, is due by November 1, 2015 (30 or 60 day extensions may be obtained), and may apply to many hedge fund managers. The purpose of Form BE-180 is for the BEA…
New York Investment Capital Identification Requirements Begin October 1, 2015
September 28, 2015Client Alerts, FEATURED PUBLICATIONAs part of the 2015 New York State corporate tax reform, significant changes were made to the definition of investment capital under Article 9-A (Corporate Tax) of the New York Tax Law. Income from investment capital (generally, stocks held for more than a year) is subject to preferential treatment in New York State and New…
IRS Extends Certain FATCA Deadlines
September 25, 2015Client Alerts, FEATURED PUBLICATIONOn September 18, 2015, the IRS issued Notice 2015-66 announcing its intent to amend FATCA regulations to extend timelines for certain transition rules and to reduce certain compliance burdens on withholding agents by modifying the rules for grandfathered obligations. Most importantly, withholding on gross proceeds will not be required until January 1, 2019 (extended from…
Final and Temporary Regulations on Dividend Equivalent Withholding Are Issued
September 22, 2015Client Alerts, FEATURED PUBLICATIONOn September 17, 2015, the IRS issued final regulations (the “Final Regulations”) requiring withholding on certain dividend equivalent payments beginning January 1, 2017. (Please see our prior newsletter regarding the delay of imposing withholding on dividend equivalents.) The Final Regulations reflect some important changes suggested in comments to the IRS following the issuance of the…
Tax Court Case Uses “Investor Control” Doctrine to Tax Inside Build-up of Private Placement Life Insurance
July 7, 2015Client Alerts, FEATURED PUBLICATIONThe tax benefits of making investments through private placement life insurance (“PPLI”), including investments in hedge funds, are very significant (i.e., the potential elimination of income tax and possibly estate tax as well). For information on the tax benefits and risks of PPLI click here to see the chapter written by partner Jeff Bortnick from…
Foreign Bank Account Reports (FBARs)
June 9, 2015Client Alerts, FEATURED PUBLICATIONOVERVIEW This newsletter serves as our annual reminder of the requirement to file Reports of Foreign Bank and Financial Accounts (“FBARs”). For calendar year 2014, FBARs are required to be filed on or before June 30, 2015. The form, which was formerly known as Form TD F 90-22.1, is now known as FinCEN Report 114.…
Cayman Islands Again Extends FATCA Registration and Reporting Deadlines
May 22, 2015Client Alerts, FEATURED PUBLICATIONThe Cayman Islands Tax Information Authority (the “TIA”) has recently extended the deadline to register on its AEOI Portal. The deadline is now May 29, 2015. The original deadline was March 31st, but has been extended several times. Cayman Islands funds must also report certain information, including name, address, TIN, and account balance, on specified…
Treasury Postpones The Effective Date for Dividend Equivalent Withholding Regulations for One Year Until January 1, 2017!
May 8, 2015Client Alerts, FEATURED PUBLICATIONSenior counsel for the Treasury Office of Tax Legislative Counsel announced today that the effective date for proposed regulations regarding U.S. withholding tax on dividend equivalent payments (e.g., payments on certain equity swaps or other derivatives referencing U.S. equity securities) has been postponed for one year from January 1, 2016, to January 1, 2017. As…
Hedge Funds – Upcoming FATCA Compliance Deadlines
April 7, 2015Client Alerts, FEATURED PUBLICATIONThis legal update highlights certain important upcoming FATCA compliance deadlines for Cayman Islands funds (i.e., offshore standalone funds, offshore feeder funds, and offshore master funds). Register with the Cayman Islands on or before April 30, 2015. Each Cayman Islands fund must register with the Cayman Islands on or before April 30, 2015. Funds must register…
Hedge Funds – Update Regarding FATCA Compliance Issues
December 12, 2014Client AlertsThis newsletter discusses important FATCA compliance issues that hedge funds should consider before the end of the year. Though the phased implementation of FATCA has afforded hedge funds additional time to comply with FATCA, important deadlines are approaching. 1. Offshore funds must register with the IRS (i.e., obtain a GIIN) to avoid FATCA withholding. While…
Hedge Funds – Tax Issues and Planning to Consider Before Year-End
November 11, 2014Client AlertsThis annual newsletter briefly highlights certain tax issues and planning that hedge fund managers should consider (or reconsider) before year-end. Tax rates are scheduled to remain the same in 2015, but with the recent filing of 2013 tax returns by many high net worth individuals, taxpayers are even more aware of the increased tax rates…
IRS Issues Chief Counsel Advice on Self-Employment Tax
September 10, 2014Client Alerts, FEATURED PUBLICATIONOverview On September 5, 2014, the IRS released a Chief Counsel Advice (ILM 201436049), which discusses the application of self-employment tax to members of a limited liability company providing investment management services. The CCA concludes that all members of the limited liability company (the “LLC”) are subject to self-employment tax on their distributive shares of…
IRS Issues Final Instructions for New FATCA Forms
June 27, 2014Client AlertsOVERVIEW We have previously issued newsletters discussing FATCA generally, preparation for compliance, and developments in the timeline for implementing FATCA. On June 25, 2014, the IRS released final instructions to new Form W-8BEN-E. This follows last week’s release of final instructions to Form W-8IMY. The FATCA world has been waiting for these instructions. FATCA GENERALLY…
Foreign Bank Account Reporting (FBAR) –Changes to Form and Procedure–
June 12, 2014Client AlertsThis legal update serves as our annual reminder of the requirement to file Reports of Foreign Bank and Financial Accounts (“FBAR”). For the calendar year 2013, FBARs are required to be filed on or before June 30, 2014. The form was formerly known as Form TD F 90-22.1 and is now known as FinCEN Report…
FATCA Extension Announced
March 31, 2014Client AlertsThe IRS has just announced that the April 25th deadline for fund managers to register their offshore funds and offshore master funds with the IRS and obtain Global Intermediary Identification Numbers (“GIINs”) has been extended to May 5th. Obtaining a GIIN by May 5, 2014, will allow a fund to avoid withholding under FATCA. IRS…
–FATCA– What Hedge Fund Managers Need To Do Now
February 28, 2014Client AlertsMost hedge fund managers, understandably, have held off doing heavy lifting regarding FATCA in anticipation of guidance to be issued and forms to be finalized (and possibly holding out hope that FATCA would be delayed for another 6 months or even repealed). At this point, hedge fund managers that manage offshore funds need to take…
Hedge Funds – Tax Issues and Planning to Consider Before Year-End
December 4, 2013Client AlertsThis annual newsletter briefly highlights certain tax issues and planning that hedge fund managers should consider (or reconsider) before year-end. Tax rates are scheduled to remain the same in 2014. FATCA compliance deadlines are beginning to approach (unless they are further delayed) and net investment income tax final regulations were just issued. Federal Income Tax…
IRS Extends FATCA Deadlines by Six Months
July 11, 2013Client AlertsOn July 12, 2013 the Internal Revenue Service (the “IRS”) issued Notice 2013-43 (the “Notice”) extending the deadline for the implementation of the Foreign Account Tax Compliance Act (“FATCA”). In general, the FATCA deadlines have been extended by six months. With no final revised W-8 forms, intergovernmental agreements still in a state of flux and…
Hedge Funds – Tax Issues and Planning to Consider Before Year-End 2012
November 12, 2012Client AlertsThis annual newsletter briefly highlights certain tax issues and planning that hedge fund managers should consider (or reconsider) before year-end. Although tax planning at the end of each year is always important, tax planning at the end of 2012 is crucial due to potential tax rate increases. Even with the election over, there is still…
New Puerto Rico Legislation May Offer Extensive Tax Benefits To Hedge Fund Managers (As Well As Others)
June 17, 2012Client AlertsPuerto Rico recently enacted tax legislation which may offer extensive benefits to hedge fund managers and other U.S. persons. Based on conversations with the Puerto Rican Government, Puerto Rico is very supportive of the use of this new legislation as a way to attract financial services business. The legislation has generally eliminated the taxation of…
June 30th Deadline – Foreign Bank Account Reporting (FBAR)
June 17, 2012Client AlertsThis Hedge Fund Tax Alert serves as a reminder for filing of Form TD F 90-22.1, Report of Foreign Bank and Financial Accounts. For the calendar year 2011, this should be received (not merely mailed) by June 30, 2012. By June 30th of each succeeding calendar year, U.S. persons (1) with foreign accounts that in…
IRS Offshore Voluntary Disclosure Program – Practical Q&A
March 21, 2012Client AlertsOn January 9, 2012, the IRS reopened its Offshore Voluntary Disclosure Program (“OVDP”), a limited federal income tax amnesty for unreported foreign assets and income. This newsletter identifies key features of the OVDP for U.S. taxpayers and highlights the risks and issues that all taxpayers should consider in evaluating the OVDP. If you have unreported…