The article discusses the taxation of 'carried interest' in private equity funds, focusing on whether such interest should be treated as capital gains or ordinary income. It argues that carried interest is a blend of labor and investment returns and suggests using holding period rules to address the taxation issue. The article compares private equity funds with hedge funds and discusses the implications of different tax treatments. It concludes that treating carried interest as short-term capital gain could bridge the divide in the debate and align with existing tax laws.
documents/EFTA01119567.pdf
{}