Venture
Fund Tax
Venture Fund Tax is part of Formidium's tax services group. We offer a full suite of tax services to solve any complexities and challenges in tax calculations, reporting, and filings for venture and private equity funds. We offer our all-inclusive tax services to a vast network of managers and funds located globally.
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Why Venture Fund Tax ?
Venture Fund Tax is part of Formidium's tax services group. We are a licensed CPA firm in Downers Grove, IL, serving over 350 clients for their tax reporting. We offer our all-inclusive tax services to a vast network of managers and funds globally, covering asset classes like venture investments/funds, real estate, private equity, and other closed ended funds investing in illiquid assets. Our experienced and qualified service team of 50+ individuals takes care of tax filings and reporting of scheduled K-1s for your investors.
Using our proprietary technology and extensive research, our tax specialists provide you with industry-leading tax support coupled with the highest level of client service.
Services we offer
We provide comprehensive tax services across Venture Fund Tax entire lifecycle, as described below:
- Review of private placement memorandum tax section.
- Preparation of U.S. federal returns (1065, 1120, 1120-S) and state tax returns for all U.S. states, including composite tax returns, handling state filing fees, etc.
- Preparation of all supporting and additional tax forms that are filed along with federal and state tax returns. (Form 8949, 4797, 8825, 8990, 8082, 8832-B, etc.)
- Preparation of federal and state schedule K-1 reporting for investor.
- Partner tax allocations using appropriate allocation methods.
- Preparation and compliance with foreign investments. (Form 5471, 8865)
- U.S. tax reporting and compliance for Non-U.S. investors. (Form 1042, 8804, 8805)
- Preparation of international reporting tax forms K-2 and K-3.
- Preparation of other miscellaneous forms like Form 1099s, name change, address change forms, and many more.
- Preparation of responses to IRS and state revenue notices.
- Offering and organizing cost amortization, book-to-tax reconciliations, maintaining tax basis for investors' capital and Venture Fund Tax investment, and handling the assignment of interest from one investor to another.
- Tax lot level capital gain/loss calculations, wash sales calculation.
- Unrelated business taxable income (UBTI).
We provide comprehensive tax services across Venture Fund Tax entire lifecycle, as described below:
- All the items covered for U.S. Venture Fund Tax.
- Preparation of foreign partnerships and blocker corporations' tax returns, including foreign master-feeder structures.
- Analysis of Venture Fund Tax structure to determine its applicable U.S. tax filings. (Passive foreign investment company vs. controlled foreign corporation determination)
- Filing applicable tax forms for non-U.S. Venture Fund Tax, including Form 8621, 5472 reporting.
- Preparation of K-1 equivalent forms for Non-U.S. Venture Fund Tax investors, including PFIC/CFC reporting.
Our tax services are tailored to venture funds, providing comprehensive analysis and customized tax adjustments in areas including:
- Schedule K1 received from underlying venture investments.
- Distribution waterfall for venture fund tax allocation.
- Considerations for committed capital structures in venture funds.
- Carry interest allocations and reporting as per IRC 1061.
- Net investment income tax (NIIT) under IRC 1411 applicable on dividends, interest, and capital gains above certain thresholds.
- Business interest expense limitations per IRC 163J.
- Treatment of qualified business income according to IRC 199A.
- Considerations for managing tax obligations upon exit or liquidation of investments.
- Analysis of qualified small businesses stock under section 1202.
- Reporting of recourse and non-recourse liability.
- Global Intangible Low - Taxed Income. (GILTI)
- Foreign-derived intangible income. (FDII)
- Net operating losses and itemized deductions specific to venture funds.
- Withholding requirements on effectively connected income and fixed, determinable, annual, and periodical income generated by venture funds.
- Calculation of state source income apportionment factors and state tax withholdings.
