Directional Alignment—Carried Interest Estate Planning in 2020Directional Alignment—Carried Interest Estate Planning in 2020
Implement potent wealth transfer strategies (while you still can).
As the outcome of the looming presidential election potentially puts at risk the existing lifetime gifting exemption, tax advisors have been hard at work discussing with fund principals different wealth transfer strategies involving the use of carried interest in private investment partnerships, such as private equity (PE), venture capital and hedge funds. The obvious potential impact from a change in administration is a reduction in the current estate and gift tax exemptions and elimination of the step-up in basis at death.
Fortuitously, planners focusing in this area received some encouraging guidance from Treasury and the Internal Revenue Service on July 31, 2020, with the issuance of proposed regulations (proposed regs) under Intern...
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