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Article: PE Firms Face Specter Of Tax Hike; New budget proposal is expected to hit PE funds through an increase in capital-gains tax rates.(Private Equity)(Private equity funds)
- Article from:
- Investment Dealers' Digest
- Article date:
- March 2, 2009
- Author:
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Byline: Kelly Holman
Private equity's tax reprieve is over.
With the release of President Barack Obama's budget proposal last week, the break private equity firms enjoyed last year from paying an increased tax rate on long-term capital gains is about to expire.
Although the budget hadn't been released at press time, private equity, hedge fund and venture capital firms are expected to pay tax rates ranging from 35% to 39% on long-term profits from the allocation of limited partnership distributions, compared with the 15% rate under the current taxation system.
If a partnership holds stocks or other capital assets for more than one year ...