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Don’t Suffer the (Tax) Consequences! See These Strategies for Private Fund Investments

September 20, 2022 (1 min read)

This practice note discusses the principal U.S. federal income tax consequences to a private fund and its investors of owning common stock or American Depository Shares (ADSs) of a foreign corporate issuer. This practice note assumes that the private fund is taxable as a partnership for U.S. federal income tax purposes and that investors are not pass-through entities; they are either U.S. individuals or U.S. organized corporations for U.S. federal income tax purposes. While non-U.S. investors can invest in U.S. partnerships and funds, this practice note does not delve into the tax consequences of non-U.S. investors who hold stock of foreign issuers indirectly through a U.S. fund.
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