Who pays the capital gains taxes in stock trades involving hedge funds? Original Investor or Hedge Fund Company
Lets say an Investor gave $10 million to a hedge fund to trade stocks. After 9 months, those funds are now worth $15 million. The taxes owed are short-term capital gains taxes. But what I am confused about is; who pays these taxes? Is it the original investor because the funds are his? Is it the hedge fund because their own company employees initiated the stock trades?
Also, how is the HF 2 and 20 fee rule taxed? Does the 20% profit sharing count as a stocks capital gains tax or does it count as a 1-time employer-employee payment for services?
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