Carried interest refers to the return on the portion of an investment fund reserved as compensation for investment managers. The value of this carried interest can appreciate significantly over time. Estate planners can create impressive tax savings by implementing techniques to transfer these assets to beneficiaries before appreciation. IRC § 2701, which covers carried interest, is complicated and requires experience to avoid its pitfalls. So, while appropriately using this section can help estate planners save clients incredible amounts of money in taxes, it is not an easy task.
See Allyson Versprille, Navigating the Minefields of Estate Planning with Carried Interest, Bloomberg BNA, August 18, 2017.
Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.
