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.
Dolores quaerat dolores et debitis vel aliquam. Cum velit quis occaecati omnis. Ratione neque qui in quis eum. Totam a modi hic voluptate qui illo. Et sunt rerum sint.
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...