Carried Interest — Should it be Taxed as Ordinary Income?
Carried Interest is a share of any profits that the general partners of a private equity fund receive as compensation, despite not contributing any initial funds.
This method of compensation seeks to motivate the general partner (fund manager) to work toward improving the fund's performance.
Typically, the amount of carried interest comes out to around 20-25% of the fund's annual profit. While all funds tend to have a small management fee,
the management fee is meant to only cover the costs of managing the fund, with the exception of compensating the fund manager.
Under proposed financial regulation, carried interest will be taxed as ordinary income rather than its current 15% rate.
Obviously, Wall Street, Banks and Fund managers are lobbying hard to preserve this extremely lucrative tax break.
Hiking the tax on carried interest is partly being sold as a tax on wealthy hedge-fund managers, but that is not the case. Investment partnerships, including real estate partnerships, and Venture Capital are the ones primarily hit.
...Read more
In any other business, "carried interest" would be called a fee, not a capital gain, since none of the beneficiary's capital is involved. Because a fee is income, it should be taxed at the higher wage rate, not the capital gains rate. It's just that simple.
...Read more
ARTICLES
Below are a few articles related to business and real estate investment.
Strategic Planning — Supercharged
Strategic Planning is practiced by just about every organization. But how many do it well? I've seen many organizations
that have let the process devolve into a perfunctory task, more administrative than strategic. That's unfortunate, because it's a powerful
tool for achieving success. How does this happen?
...>>Read more
The Art of Developing Strategic Planning Models
All companies do Strategic Planning. They have to, now more than ever, because the environment they operate in is throwing challenges at them from every direction and at ever
increasing frequency: e.g. competitive, environmental, economic, regulatory, social, etc. To handle the load, businesses are refining and streamlining their strategic planning processes.
...>>Read more
Tips for Successful Software Outsourcing
Software development projects can easily get out of control. Witness the recent FBI project to automate and facilitate case management — the "Virtual Case File system",
which after four years and several hundred million dollars of development cost, was essentially scrapped before even being implemented.
...>>Read more
USA Energy Usage
The USA uses 100 Quads of primary energy per year (as of 2006) and is expected to grow by 30% by the year 2030 (about a 1.1% annual increase — compounded).
...>>Read more
Real Estate Investment: A Discussion of No Money Down Programs
Real estate investment has always seemed to have a special fascination with most people. I think one of the reasons for this is because people are comfortable with Real Estate. It's tangible — bricks and mortar.
It's simple and straightforward. How many times have we heard the cliché "they're not making any more of it".
...>>Read more
Real Estate Investment: A Discussion of Capitalization Rates and Valuation
The "Capitalization Rate", and its inverse, the "Net Income Multiplier", are probably two of the most commonly used ratios in real estate investment analysis.
But is the cap rate useful? And if so, how should you use it? To answer these questions we first have to define it. The formula is as follows:
...>>Read more
The above quote is often referred to as the 6 p's. And while it's not an exact quote, it's close enough to convey what we're all about—
providing planning solutions for achieving success and preventing failure.
Integrated Planning Systems™ is dedicated to the proposition that it is the quality of one's planning tools and techniques that separates winners
from losers. To this end, we dedicate ourselves to providing first class strategic, financial and technology planning services and products, both custom and
off the shelf, to clients throughout the country.
Check out the product lines in the main menu above for more information. In particular, if you're
interested in Real Estate Investment Analysis Software, check out our Real Estate Investment Software page.
Strategic Thinking Requires Strategic Analysis
YOU NEED THE IPS STRATEGIC PLANNING MODEL for UTILITIES
Integrated Planning Systems is a premiere developer of strategic and financial planning models.
If you do strategic planning, you need this model. Find out what the IPS Strategic Planning Model can do for you.
Click through for details.
Strategy Plus Action Equals Results
YOU NEED OUR STRATEGIC and/or OPERATIONAL PLANNING MODELS
Integrated Planning Systems is a premiere developer of strategic and financial planning software.
With the IPS Strategic Planning model, you will be able to quickly see the impacts of alternative strategies.
With the IPS Tactical Planning Model, you will be able to quickly see the impacts of altering your operating plans and budgets.
Previously only customized for individual clients, we are now planning to offer these models as "canned packages".
Watch for their imminent release.
Click through for more details.
Helping You to Make Money in Real Estate
"A smart buy is always better than a lucky sell any day!"
A famed Investment Real Estate Professor once told me that. It's good advise. Our Real Estate Investment Software
is the tool that will help you make smarter investment property decisions through superior investment property analysis.
Known for it's power, flexibility and ease of use, our Real Estate Investment Analysis Software gives you the best bang for the buck on the market.
Previously used only for our clients, we are now offering it to the public. The price? Just $389! But Order Now,
and receive a limited time introductory price of $189 — a $200 savings. A small investment for the most powerful and fun to use
real estate investment software there is. What's your return on this investment? Off the charts! Don't believe me? Seeing is believing.
Click the Real Estate Investment Software link above for more details.
Being lucky is great... Being smart is better!
Don't Wait for the Future to Happen! Plan and Make it Happen!
YOU NEED THE IPS PERSONAL FINANCIAL PLANNING SOFTWARE
With this model, you will know you're financial condition now and into the future. You'll be able to alter assumptions like increasing your IRA contributions, cutting discretionary expenses
or re-financing your mortgage to see how this changes your future Net Worth.
Previously used only for our clients, we are now planning to offer it to the public for next to nothing.
The price will be just $78. Watch for its imminent release.
Click through for more details.
Need Planning and Financial Expertise?
WE CAN HELP
We don't just provide tools for strategic and financial planning; we also provide help over a wide range of issues: e.g. implementing
a strategic planning process, helping to write a strategic business plan, marketing plans, financial forecasting and analysis, capital requirements forecasting, help
getting funding from capital markets, developing a Web strategy, turning around troubled companies, developing accountability reports and Board Assessment reports.
Click through for more detail.
Unparalleled Service for Unbelievable Cost
ONE STOP SHOPPING FOR ALL YOUR ASSOCIATION NEEDS
Apex Meeting & Management Consultants is a wholly owned subsidiary of Integrated Planning Systems, Inc. which provides contract services to associations throughout the Country.
This group has expertise in meeting planning, publishing, strategic planning, accounting and finance, website development, and all other aspects of association management.
The productivity that this team provides is unmatched.
Click through for a full list of services and an association specific statement of experience and qualifications.
This Mortgage Calculator is a simple spreadsheet download that calculates mortgage payments. It also provides a schedule for the first 36 months. Feel free to share it with friends and family.
This Retirement Calculator is a simple spreadsheet download that calculates your retirement needs. It's shows you a year-by-year graph and table of your investment account and change in investments. It's in constant dollars. Feel free to share it with friends and family.
National Reputation for Providing Quality Solutions
I have provided products and services for companies all over the country for over 20 years. In the process, I have gained a national reputation for quality, excellence and value.
Products and Services
Strategic Planning, Business & Market Development, Valuation, Merger/Acquisition (from several $million to several $billion), Computer Model Development, Financial Planning and Analysis,
Web-site Development, Technology Assessment and Implementation/Project Management.
Started various Businesses (e.g. Consulting, Software Development, Real Estate company, Association Management Company, etc.)
I have been used as an “Expert Witness” (provided testimony) for companies and State agencies with regard to strategic and financial analyses and computer modeling related to regulatory decisions.
I have also developed software products that have been used as a basis for regulatory
decisions (i.e. testimonies, analyses and exhibits) in numerous states across the country.
Publishing and Public Speaking
I have authored articles on strategic planning and computer technology for industry magazines and lectured at industry trade group meetings, conventions,
seminars and training events relating to strategic planning, competitive based strategies, leadership, corporate culture, team work and computer modeling.
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and computer modeling.
Carried Interest —
Should it be Taxed as Ordinary Income?
Carried Interest is a share of any profits that the general partners of a private equity fund receive as compensation, despite not contributing any initial funds. This method of compensation seeks to motivate the general partner (fund manager) to work toward improving the fund's performance.
Typically, the amount of carried interest comes out to around 20-25% of the fund's annual profit. While all funds tend to have a small management fee, the management fee is meant to only cover the costs of managing the fund, with the exception of compensating the fund manager.
Under proposed financial regulation, carried interest will be taxed as ordinary income rather than its current 15% rate. Obviously, Wall Street, Banks and Fund managers are lobbying hard to preserve this extremely lucrative tax break.