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- Title
Taxation of United States Tax-Exempt Entities' Offshore Hedge Fund Investments: Application of the Section 514 Debt-Financed Rules to Leveraged Hedge Funds and Derivatives and the Case for Equalization.
- Authors
Lepree, Summer A.
- Abstract
The article discusses the different tax treatment of investment made in offshore hedge funds and investment made domestically by tax-exempt entities of the U.S. and potential measures to eliminate the disparity. It is reported that offshore investment made by such entities cannot be taxed. However, if such investment is made in the U.S. the entities will have to pay a tax of 35% on some portion of their investment income. As a result such investors are investing outside the country. It is reported that university endowments and pension funds are allocating a substantial amount of their money in hedge funds. The policy of the U.S. government responsible for this phenomenon is also discussed. It is stated that the U.S. congress should review the existing rules and make necessary amendments.
- Subjects
UNITED States; HEDGE funds; CAPITAL gains tax laws; UNITED States tax laws; PENSION trust investments; CAPITAL movements; NONPROFIT organizations; TAX administration &; procedure; UNITED States. Congress; TAX accounting
- Publication
Tax Lawyer, 2008, Vol 61, Issue 3, p807
- ISSN
0040-005X
- Publication type
Article