Year-End Tax Update: Important Tax Issues to Consider
With President Obama re-elected, now is the time for hedge fund managers to consider some important tax issues and potential law changes. The possible expiration of Bush-era tax cuts, enactment of several new provisions, and not much time left in 2012 make for a “perfect storm” in the tax planning world. The following are some key areas to focus on as year-end approaches:
- Increase in individual tax rates – The current individual tax rates in place for 2012 range from 10% and increase to 35% based on taxable income (gross income less allowable deductions). The rates after 2012 are set to increase to a range of 15% to 39.6%. Funds should consider accelerating ordinary income into 2012 to take advantage of the lower brackets.
- Individual long-term capital gains and qualified dividends tax rates – These are currently taxed at a rate of…
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