The new tax law introduced as the Tax Cuts and Jobs Act (TCJA) includes considerable changes to the Internal Revenue Code that will impact the private equity and venture capital industries. The majority of the changes are effective Jan. 1, 2018, but some of the changes will have an impact on 2017 taxes as well. Private equity and venture capital firms should understand how the changes will impact their business, including the impact to their funds, investors, underlying investments, current and future tax structuring, as well as their management company. Firms should develop a course of action to address the changes imposed by the TCJA that will affect areas such as effective tax rates, preferred operating and acquisition structures, and the potential need for additional K-1 disclosure.
