Is Your Hedge Fund A Trader Or Investor? It Matters
February 4, 2014, 1:41 PM EST
Law360, New York (February 4, 2014, 1:41 PM EST) -- Hedge fund managers should be aware of two recent U.S. Tax Court memorandum decisions that shed further light on when a taxpayer, such as a hedge fund, is considered to be a "trader" or "investor" for tax purposes — a designation that may affect the deductibility of fund expenses.
While these cases are more in a long line of decisions involving individuals who trade for their own account, they highlight the factors that courts focus on when making the trader versus investor determination. In Endicott v....