Co-invest pre-tax?
Question for people in REPE who are familiar with fund co-invest:
Say you defer part of your bonus (assume $100k for simplicity) and use that to co-invest in your closed-ended fund.
Fast forward 7-10 years. Your fund did a 2x so you are taking $200k out.
Do you pay income taxes on $100k return OF capital + cap gains on the $100k return ON capital?
Or do you pay just cap gains on all $200k?
Trying to think if there's some kind of tax benefit to doing something like this.
I presume your $100K bonus that should have been taxed as income tax was deferred and the $100K profits are taxed as capital gains.
yeah that's what I'm thinking too. would be way too good to be true I guess.
Facilis totam vero sunt ipsa possimus provident. Dolores velit impedit quia quasi aut.
Magni repellendus libero unde cum et vitae nesciunt. Est maiores et saepe aliquid alias asperiores. Animi ut ea architecto quidem totam rerum. Dicta quo dicta quis ratione recusandae cumque.
Necessitatibus iure rem aut neque. Non voluptate quidem repudiandae vel.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...