A new three-year (vs. one-year) holding period required to qualify for the tax break on carried interest profits was intended to save the federal government over one billion dollars over the course of a decade. However, some in the market have speculated about ways to minimize the impact of the new provision. Speaking with Bloomberg, Debevoise Tax partner Rafael Kariyev cautioned "Any structure designed to avoid the carried interest provision is likely to be attacked by the IRS in regulations or other guidance."

"Hedge Fund Managers Shift Billions Over Carried Interest Concern"
By Lynnley Browning and Miles Weiss
May 17, 2018