In this episode of Willis Weighs In, Benjamin M. Willis, Tax Notes Federal contributing editor, discusses carried interests with partnership tax expert Monte A. Jackel.

The carried interest/promote tax rules require careful planning and, almost always, expert legal analysis applying Section 1061 of the Code and the Final Regulations to the particular facts.

A carried interest holder’s “net applicable partnership gain” would be taxable as short-term capital gain, and thus not eligible for the favorable long-term capital gain rates.