Hedge Funds

Hedge Funds

Hedge fund structures and investment strategies create significant tax complexities and require thorough tax planning.

Whether employing a frequent trading strategy resulting in wash sales, or the use of derivative and hedges that may result in straddles and constructive sales, Andersen has the experience and technology to analyze these transactions on a large scale.  

Andersen advises several of the largest hedge funds and their general partners in the United States and continues to address the complex issues facing the industry. 

We offer an organized, experience-based approach, including:

• Fund structuring that addresses special investor issues such as unrelated business taxable income (UBTI) for tax-exempt entities and effectively connected income (ECI) for foreign investors.
• Preparation and fulfillment of filing requirements around Form 1065s, Schedule K-1s, passive foreign investment company (PFIC) statements, including consideration of the excess distribution regime, mark-to-market regime, and the qualified electing fund (QEF) regime.
• Tracking of contributed property and mandatory built-in gain or loss basis adjustment calculations.
• Partners’ strategies for profits interest ownership, including analysis of prospective legislation.
• Diversification of wealth concentration and post-diversification consulting for the fund partners.
• Qualified small business stock (QSBS) considerations, compliance, and planning.
• Integrated tax compliance and project level consulting for principals, as well as the fund itself across local, state, federal, and international jurisdictions.
• Valuation of a wide array of tangible assets, intangible assets, and liabilities.