In this practical webinar, you will learn how to accurately reconcile complex Form K-1 for hedge funds and other alternative investments and report them on a Form 1040.

For many K-1s received by taxpayers, reporting the pass-through items of income and loss is a fairly straightforward process. However, for hedge funds and other multi-fund pass-through entities, the K-1 often requires the tax preparer to refer to information from numerous footnotes. A Schedule K-1 from an alternative investment fund can easily exceed 50 pages or more, including details for individual transactions among the various funds or investments held.

These K-1s generally have important tax reporting information in the extensive footnotes following the standard page 1 boxes listing income, deductions, credits and distributions. To allocate and report items on the client’s tax return, you must be able to identify the type of fund the K-1 is generated from and use information found in the footnotes to prepare an accurate and complete return for clients.

Upon course completion, you will be able to describe:

·         Brief background and history of hedge funds

·         Overview of investor, trader, and fund of funds

·         How to identify the type of K-1 you are receiving (i.e. investor fund, trader fund, fund of funds) and treatment of income and expenses from each type of hedge fund K-1

·         Net Investment Income Tax - 3.8%

·         Reconciliation schedule to tie Fund of Fund K-1s to tax return

·         How to decipher footnotes

·         Sample K-1s for each type of fund

·         Impacts to hedge fund K-1s from the Tax Cuts and Jobs Act signed on December 22, 2017