May 21, 2014
Speaking as a panelist at a May 20 Practising Law Institute (PLI) seminar titled, "Tax Planning for Domestic & Foreign Partnerships, LLCs, Joint Ventures & Other Strategic Alliances 2014," Linda Z. Swartz, Chair of the Tax group at Cadwalader, commented on tax reform proposed by House Ways and Means Committee Chair Dave Camp (R-MI) related to the tax treatment of carried interest and Section 83(b) elections:
Using a deemed loan mechanism, Camp proposes to tax at ordinary income rates a slice of the imputed return on the carried interest, Swartz said. "If you had a staged carry . . . you could be looking at a very large account that would be subject to tax at ordinary income rates," she said. Swartz added that Camp's proposal could impose "perhaps a little more" tax than the Cut Unjustified Tax Loopholes Act of 2013 (S. 268), introduced by Sen. Carl Levin, D-Mich., and the proposal included in President Obama's fiscal 2015 budget plan.
Swartz addressed some of the confusion surrounding Camp's proposal. Although the proposal's section-by-section summary states that Camp's carried interest changes would "not apply to a partnership engaged in a real property trade or business," Swartz said that "it does cover trades and businesses, which would include real estate." And while Camp intended the proposal to sweep in the carried interest received by a general partner of a private equity fund, Swartz pointed out that private equity funds "may not actually have trades or businesses," adding that there are "a lot of unanswered questions that will need some close investigation."
Swartz [also] said that given the increased focused on section 83 in recent years, taxpayers would be well advised to file a section 83(b) election if they fail one of the requirements in Rev. Proc. 93-27, 1993-2 C.B. 343.
[Eric Sloan of Deloitte Tax LLP] asked Swartz what she advises taxpayers to list as the FMV of a partnership profits interest. "There certainly is the theory that profits interests have no ascertainable value up front" absent evidence of value, Swartz said.
The Bank of England has initiated a review of its own exposure to LIBOR,
Scott Cammarn, Jonathan Watkins, Mark Chorazak, Aaron Lang
On 7 June 2019, Regulation (EU) 2019/876 (CRR II) was published in the Official Journal of the EU.