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You could open the model account in an IRA.
-----Original Message-----
From: janitor@xxxxxxxxxxxx [mailto:janitor@xxxxxxxxxxxx]
Sent: Monday, March 03, 2003 2:44 PM
To: omega-list@xxxxxxxxxx
Subject: Paying taxes on hedge fund "Model Account"
Suppose you have a hedge fund and suppose you open a
"model account" with something like $1000.00, just to provide
an actual "real money" track record showing precisely what an
investor's account has done over the life of the fund.
If your hedge fund is wildly successful, the model account will
grow to a tremendous equity and the taxes on those profits would
be immense (it is feverishly hoped).
How do you pay the taxes on the model account? You certainly
don't want to withdraw funds from the model account to pay its
taxes; that'd ruin the very purpose of the model account.
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