U.S. may grab $100 billion bounty as hedge-fund managers pay taxes
Source: The Wall Street Journal.
U.S. may grab $100 billion bounty as hedge-fund managers pay taxes
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Loophole Closed: Hedge-Fund Managers Prepare Huge Tax Checks
Steven Cohen, David Einhorn and others are facing looming tax bills for years of offshore gains
By Gregory Zuckerman and Rob Copeland
https://twitter.com/GZuckerman
https://twitter.com/realrobcopeland
July 20, 2017 5:30 a.m. ET
Hedge-fund managers for years accumulated offshore gains without paying federal and state taxes. Now Uncle Sam is going to get paid.
Steven Cohen is one of many managers preparing to write huge checks in early 2018 due to a crisis-era decision to close a tax loophole that long benefited some of Wall Streets wealthiest investors. ... The billionaire founder of SAC Capital Advisors LP amassed deferred offshore income of more than $1 billion likely subject to the taxation, said people familiar with the matter. Other hedge-fund managers facing personal tax bills of over $100 million include David Einhorn of Greenlight Capital Inc. and Daniel Loeb of Third Point LLC, said people familiar.
Total payments from all managers could amount to $25 billion, according to a 2008 estimate from the Joint Committee on Taxation. Some tax specialists say the bill could be even higher: $100 billion or more.
....
The New York Times in 2007 highlighted this loophole, and Congress overwhelmingly voted to close it the following year as a way of raising revenue and stabilizing the financial sector during the 2008 financial crisis. The change, part of the Emergency Economic Stabilization Act of October 2008, was made in section 457A of the IRS code. ... The legislation gave managers a decade to pay taxes on money accumulated before the law changed. That deadline is now nine months away.
Write to Gregory Zuckerman at [email protected] and Rob Copeland at [email protected]
Read more: https://www.wsj.com/articles/loophole-closed-hedge-fund-managers-prepare-huge-tax-checks-1500543002
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https://www.wsj.com/articles/loophole-closed-hedge-fund-managers-prepare-huge-tax-checks-1500543002?mode2tw
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It's every hedge fund manager's worst nightmare: Paying the same taxes as everyone else. $100B bill comes due
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sandensea
(21,633 posts)groundloop
(11,519 posts)A chat with 45*, a couple of checks to Turtle and Ryan then they'll be good to go.
Grins
(7,217 posts)Now watch Trump take credit for this. You can almost hear it now; "WE brought billions, and billions, and billions back...."
mahatmakanejeeves
(57,439 posts)back to edit the zeroth post to add the paragraphs that explain how this came about.
IronLionZion
(45,440 posts)because we all know that hedge funds are such job creators...always creating so many jobs... Won't someone please think of the poor suffering job creators? They need a break.
Watch him use this as an excuse for why taxes are too high and bad for our economy.
I'm glad this was exposed 10 years ago, but disappointed that they allowed hedge funds 10 years to prepare for it. Both should have happened sooner.
BumRushDaShow
(128,958 posts)and notably during hearings for the legislation. These folks took no "salary" but merely pocketed the capital gains for doing the fund management (which at the time had the lower 15% rate for tax purposes). But I didn't follow up on the timing... Am surprised it took this long to finally go into effect (or maybe I shouldn't be surprised).
packman
(16,296 posts)Let's get started, pass out the shovels
IronLionZion
(45,440 posts)you'll get sick of winning. Feel the earn!
FakeNoose
(32,639 posts)... so this is no surprise. They're holding onto their money for as long as they can, but it's time to pay the piper.
Of course Uncle Sam gets no interest penalty for the late payments, the hedge funds get to keep all the interest.
I think this is one tax that we can all agree on, except for the hedge fund managers!