Taxation of Carried Interest

Re:Taxation of Carried Interest by hn_throwaway_99 on Saturday June 09, 2018 @11:52PM (#17276385)

Then let hedge fund managers organize their funds as equity purchases from their investors. To use your analogy, if managers were deserving of 20% of the profits, then structure it as investors own 80% and managers own 20%.

Of course, that would make many hedge funds a lot less attractive for many investors. Hedge fund managers want to have their cake and eat it too.

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Re:Taxation of Carried Interest by harryh on Saturday June 09, 2018 @11:53PM (#17276388)

That is (more or less) what hedge fund managers do.

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Re:Taxation of Carried Interest by hn_throwaway_99 on Sunday June 10, 2018 @12:21AM (#17276499)

I know they are organized as partnerships, but the managers don't really have any equity rights to the committed capital, only the profits. But I guess that's really no different than an investor with preference rights in a startup.

In any case, thanks very much for your explanations, really helped me think about the issue in a different way.

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Re:Taxation of Carried Interest by harryh on Sunday June 10, 2018 @12:25AM (#17276514)

Happy to help out!

In any case, as I stated elsewhere(1), I'm actually not sure what I believe on this topic. I can really see it both ways.

1. https://news.ycombinator.com/item?id=17276214

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