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Abstract: 

The enactment of Sections 409A and 457A, and the proposal to change the taxation of carried interest, in addition to general tax considerations including whether tax rates will be increased, all have significantly impacted the taxation of hedge funds, hedge fund managers, and investors. Being an electing large partnership may be a way to obtain a deduction of 30% of miscellaneous itemized deductions for U.S. federal income tax purposes, which may be a better result for many hedge fund investors.

Keywords: Trader v Inventor; Publicly traded partnerships; mark-to-market election

Affiliations:  1: Kleinberg, Kaplan, Wolff & Cohen, P.C..