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I am setting up an exempt commodity pool structured as an LP with my
management company as the sole GP as well as the trading advisor. I lieu of
cash out of the pool to the management company for incentive / management
fees, which would be ordinary income to the management company and a
deductable expense to the pool participants, I would like to have the GP
compensated via an allocation of pool profits which in the case of 1256
contracts would receive the favorable 60/40 tax treatement.
The accountant I am using to help set this all up says this would not be
allowed under IRS rules. Can any accountant out there be of assistance to
me?
Scott Hoffman
President
Red Rock Capital Management, Inc.
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