Quote:
Originally posted by Mmmm, Burger (C.J.)
1) Most private equity fund managers are taking risks. To be sure, primarily with investors' money, but also their own. Indeed, the investors who get the 80% of the gains (that is all gains less the 20% carried interest), are taxed at the k-gains rate.
2) There are reasons for a lower k-gain rate other than providing incentives for risk taking.
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Right. And depending on how the deal is structured, there is no guaranty that carried interest will be paid or paid in full.
If they change this, then to be intellectually fair they also should change the tax treatment of ISOs.
