Bracewell’s Steven J. Lorch recently discussed with Law360 reporter Amy Lee Rosen the uncertainty about interest paid to the financial managers of high-net-worth families after the Internal Revenue Service issued its final regulations on carried interest in January 2021.
Lorch said that while the applicable statute, Section 1061(b), doesn’t explicitly list family offices as qualifying for the exception, the proposed rules confirmed the industry’s understanding that they do qualify. However, the regulations did not define the scope of the exception or even provide a safe harbor for family offices, he said.
“I think … the lack of nuance [is what] people have found frustrating,” Lorch said. “The big takeaway is that the lack of guidance just has created some uncertainty for offices in terms of planning for these rules.”
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