Carried Interest Loophole on yore Hedge Funds

[BuDG123]

I know many of you are hedge fund managers, venture capitalists or a partner in a private equity firm.

Do you guys use this long standing tax break tool? It brings your effective tax rate down from like 48% all the way down to only 20%. If you are not using this loophole this tax season, you are pissing way your hard earned cash. This loophole has been a core tenant for campaign contributions on both sides of the isles for decades, and is why the rich will always get richer. It is a known loophole that will never go away no matter who is elected. The last 8 presidential candidates specifically said they would do away with it, but somehow, it prevails! Use it to your advantage. Carry that compounded interest, buy some rare art! (Once you are over the hurdle)

[rubechick]

No, but I give my tax guy the receipts for my license tabs. Hope that helps.

[Voltron]

I plan to start a hedge fund soon so thank you for this information.

[Unbiased Observer]

I plan to start a hedge fund soon so thank you for this information.

You could run it from your tractor while it is on autopilot.

[Voltron]

I plan to start a hedge fund soon so thank you for this information.

You could run it from your tractor while it is on autopilot.

Or even during a Vegas trip

[anthony]

No, but I give my tax guy the receipts for my license tabs. Hope that helps.

You itemize?

[rubechick]

No, but I give my tax guy the receipts for my license tabs. Hope that helps.

You itemize?

Probably not, but I add them to the tax guy folder regardless. It looks like he did tally it up, but ended up using the standard deduction this year.

[anthony]

No, but I give my tax guy the receipts for my license tabs. Hope that helps.

You itemize?

Probably not, but I add them to the tax guy folder regardless. It looks like he did tally it up, but ended up using the standard deduction this year.

That’s good to hear. I don’t have the energy to organize receipts like that….

[rubechick]

You itemize?

Probably not, but I add them to the tax guy folder regardless. It looks like he did tally it up, but ended up using the standard deduction this year.

That’s good to hear. I don’t have the energy to organize receipts like that….

Those are easy - when I pay them during the year, I just add the receipt to that year's folder. That's the only thing in the "2024 Taxes" folder so far. I think it's just a habit from when I used to enter them when it actually mattered. Same with charitable donations - they used to reduce taxable income, but now they don't matter unless they're really big (bigger than I donate at least!)

[anthony]

Probably not, but I add them to the tax guy folder regardless. It looks like he did tally it up, but ended up using the standard deduction this year.

That’s good to hear. I don’t have the energy to organize receipts like that….

Those are easy - when I pay them during the year, I just add the receipt to that year's folder. That's the only thing in the "2024 Taxes" folder so far. I think it's just a habit from when I used to enter them when it actually mattered. Same with charitable donations - they used to reduce taxable income, but now they don't matter unless they're really big (bigger than I donate at least!)

We used to itemize, back when the wife did daycare and we had a mortgage and stuff. We had a tax person to take care of it at that time. Then when my wife went back to work and the house was paid off i took a look at the tax forms after the tax lady completed them. I saw she went through the work of computing the itemized return vs standard deduction but choose the standard deduction. I was paying something like $50 a form for her to do the work. I decided i could save some money and do it myself since itemizing didn’t make sense anymore.

[rubechick]

That’s good to hear. I don’t have the energy to organize receipts like that….

Those are easy - when I pay them during the year, I just add the receipt to that year's folder. That's the only thing in the "2024 Taxes" folder so far. I think it's just a habit from when I used to enter them when it actually mattered. Same with charitable donations - they used to reduce taxable income, but now they don't matter unless they're really big (bigger than I donate at least!)

We used to itemize, back when the wife did daycare and we had a mortgage and stuff. We had a tax person to take care of it at that time. Then when my wife went back to work and the house was paid off i took a look at the tax forms after the tax lady completed them. I saw she went through the work of computing the itemized return vs standard deduction but choose the standard deduction. I was paying something like $50 a form for her to do the work. I decided i could save some money and do it myself since itemizing didn’t make sense anymore.

Good call out - I just checked and it looks like he's not charging us for that. He's probably just glancing over everything, eyeballing that there's no way it's higher than the standard $27,700 deduction and then ignoring them. I should ask him next year if he just wants me to leave them out.