Axing Carried Interest Tax Perk May Create New Loopholes

By Vidya Kauri (May 2, 2017, 9:26 PM EDT) -- The favorable tax treatment that private equity and hedge fund managers receive on the profits of successful business ventures may be on the chopping block, but those who benefit from it are likely to see an even bigger tax break if President Donald Trump follows through on his plan to slash tax rates for pass-through entities.

On Monday, Trump repeated his campaign pledge to tax so-called carried interest like ordinary income instead of at the lower capital gains rate of 20 percent. Carried interest is the compensation, on top of regular fees, that general partners in private equity funds, hedge funds...

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