Effective January 1, 2019, a new tax rule took effect that applies to Fund Managers.
A fund manager is now required to hold a position for at least 3 years in order to benefit from long-term capital gain from a performance allocation.
In the past, the fund manager was able to reap benefit from a performance allocation and receive long term capital gain treatment on positions held for over one year. The limited partners will continue to treat benefit from long term capital gain treatment on positions held over 1 year.
If you need further clarification on this change, please reach out to Mike Coglianese at 630-461-5841 or email Mike@cogcpa.com.