Learn how the Start Fund allows you to launch a real VC fund instantly with no up front costs.
RSVP for May 29th
Previous Post
Next Post
1

Asked by

Community Member

on

in

Accounting & Taxes

Has anyone gone through the life cycle of a PFIC investment, from investment through to sale, with the reporting in between?

We are a VC fund considering making an investment in a PFIC and while I know there are reporting obligations during the investment period, what additional impacts are there from a tax standpoint around sale or divestment? 

Should we expect to pay additional taxes? Would these be passed on to LP's or charged at the Fund level? What strategies can be taken to mitigate any impacts?
1 See in Base
0

Answered by

Mike Suprovici

on

PFIC/CFC rules are complex and you may be required to distribute additional tax documentation to US investors, so you should reach out to your fund's tax provider to determine if your fund has any annual filing requirements. More info on PFIC below:

https://www.lexology.com/library/detail.aspx?g=e3626fb7-eb6b-4402-b9b8-aeb5f2a34816 https://www.amicorp.com/AmiNews/2017/july/US_tax_implications_and_reporting_requirements.php

Join the Leaders of Venture 2.0

Our graduates are creating disruptive capital with exceptional expertise, ethical investing practices, and exceptional returns. Whether you're launching your first fund or scaling an established firm, VC Lab provides the tools, network, and support needed to succeed in today's venture landscape.

Apply Now
How do I start raising my first venture fund? What are the key considerations for becoming a Limited Partner?
How can I improve my emerging manager firm's deal flow? What strategies help attract institutional LPs?
How do I build a compelling investment thesis? What are best practices for portfolio management?
How can I differentiate my VC firm in a crowded market? What are the typical fund terms for emerging managers?