HF Taxes

Since long term cap gains tax rate now applies to holdings of at least 3 years and most activist HFs don’t hold positions that long, are the taxes seriously half the profit at the normal rate? If so, PE definitely seems to have an edge.. if you get 50bps carry at a decent sized fund, after tax payouts might seem better..

6 Comments
 
yoloyolo567

Since long term cap gains tax rate now applies to holdings of at least 3 years and most activist HFs don't hold positions that long, are the taxes seriously half the profit at the normal rate?
If so, PE definitely seems to have an edge.. if you get 50bps carry at a decent sized fund, after tax payouts might seem better..

You don't  know too much about taxes, do you?

 

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