I come to learn that the partnership will likely go through a re-capitalization event, likely within the next few months. We've been told
a) the Class B units will have accelerated vesting and b) there will be a distribution of money. I'm trying to understand a few things about profits interests and my future tax liability. The new corporate structure will be very similar, but with a new limited partnership owning the corporation. I may or may not receive a new Class B grant, but I will have the opportunity to invest in Class A units in the new structure and defer some of the tax liability (or so I'm told). I will likely pass as I generally try to sell any vested/sellable company stock ASAP. Questions
- On the K-1, what line will profits interests show up on?
- Will my 83(b) filing allow me to be taxed at long term capital gains? I read something about a 3 year holding period for profits interests. When does that clock start?
https://www.natlawreview.com/article/3- ... %20assets.
- Will I be responsible for self-employment tax?
- Any other questions I should ask and/or think about?
I don't expect the $ amount to materially change my family's finances. This should be more like a nice bonus, but since we usually do pretty detailed tax planning and withholding adjustment during the back half of each year, I'm trying to understand what questions to ask. Thanks in advance.