Private Equity International: Tax Reform Leaves Firms Weighing Up the Possibilities

Debevoise tax partner Rafael Kariyev recently spoke with Private Equity International concerning the impact of U.S. tax reform on the tax treatment of carried interest. Mr. Kariyev explained to PEI that add-on acquisitions can complicate the carried interest tax calculation for PE fund managers:

“Rafael Kariyev, a tax partner at Debevoise & Plimpton, suggests in these cases a portion of the carried interest would be taxed at ordinary rates and the remainder as capital gains, although he conceded it would be challenging to determine how to split that in the case of merged corporations. ‘The issue comes up primarily if you’re selling a portion [of the company], and what you’d like to do is sell the stock you’ve held for longer, but you can’t do that. When you sell, a portion of it will be long-term, and a portion will be short-term.’”

Tax reform leaves firms weighing up the possibilities
By Isobel Markham
February 28, 2018