More Carried Interest Guidance Possible After IRS Punts in Rules (2)

The IRS left room for it to issue more guidance on changes to a favored tax break for hedge fund managers after releasing final rules.

The rules (T.D. 9945) released Jan. 7 carry out a provision of the 2017 tax law that requires investment funds to hold assets for more than three years—up from one year—for managers to get a preferential tax rate on their share of the fund’s profits, known as carried interest. Assets that meet the holding period requirement are subject to a 20% rate, generally accompanied by an additional 3.8% net investment income tax, ...