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Tax Law Roundup current law developments in U.S. taxation

Category Archives: Capital Gain

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IRS Curtails Profits Interests In Lieu of Management Fees and More

Posted in Capital Gain, Compensation, Funds, Partnership/LLC

The IRS issued the much anticipated proposed regulations that severely curtail the practice of a fund manager waiving management fees in exchange for a share of future partnership profits. In essence the regulations tighten the necessary “entrepreneurial risk” required of the future profits interest plus list five other negative factors for recasting the profits interest… Continue Reading

Tax Court Denies Capital Gain Treatment to Real Estate Sellers

Posted in Capital Gain, Real Estate

In Si Boo LLC, the Tax Court denied capital gain treatment and assessed self-employment taxes on three taxpayers who regularly sold real properties acquired by tax deed.  The court held that, although the taxpayers bought the tax liens primary to profit from redemptions of the liens, the repeated sales of properties forfeited to them as… Continue Reading