Investment Fund Services
VC & Investment Fund
Accounting & Tax.
Full-service accounting and tax compliance for US venture capital, private equity, and hedge funds — Form 1065, K-1/K-2/K-3, LP administration, carried interest reporting, and foreign LP withholding. We keep your fund compliant so you can keep your LPs happy.
What's included
US venture capital and private equity funds — virtually always structured as limited partnerships or LLCs taxed as partnerships — have a distinct and demanding compliance profile. Unlike operating company tax returns, fund compliance involves per-partner K-1 allocations that must match the fund's LP agreement exactly, international reporting for foreign LPs, carried interest calculations under Section 1061, and potential withholding obligations on foreign partner income.
Our fund services practice covers the full compliance stack for fund managers: quarterly fund bookkeeping, annual Form 1065 preparation with all K-1/K-2/K-3 schedules, withholding tax compliance for foreign LPs (Forms 8804, 8805, 8813), FDAP withholding via Form 1042/1042-S, and direct LP support so your investors get what they need to file their own returns on time.
We also advise on fund structuring, GP carry structure optimization, Section 1061 carry tracking, and PFIC identification for portfolio company investments.
Who this is for
Venture capital funds, private equity funds, hedge funds, real estate investment funds, and family offices structured as US partnerships. Funds with international LPs, including India-origin fund managers raising from US institutional investors. Fund GPs who need to ensure their carry is reported correctly and their LPs receive clean, timely K-1s.
We also work with India-based fund managers who are launching US-domiciled feeder funds or parallel fund structures to receive investment from US institutional LPs.
Our process
Fund Onboarding
We review the fund's LP agreement, understand the waterfall and carry structure, and document all relevant elections (tax year, accounting methods, §754 election).
Quarterly Bookkeeping
We maintain the fund's books quarterly — tracking investments at cost and fair value, recording management fees, expenses, and capital calls/distributions.
Annual Tax Return
We prepare Form 1065, all K-1/K-2/K-3 schedules, withholding returns (8804/8805), and applicable state returns. Returns are reviewed by a senior tax professional before filing.
K-1 Delivery & LP Support
We deliver K-1/K-3 packages to all LPs and the GP, and provide direct support to LPs who need help understanding their allocations and filing obligations.
Frequently asked questions
A typical US fund (structured as an LP or LLC) requires: Form 1065 (partnership return) by March 15; Schedule K-1 to each LP and the GP; Schedule K-2/K-3 for funds with foreign LPs or foreign portfolio companies; Form 8804/8805 if there are foreign LP withholding obligations; Form 1042/1042-S for FDAP withholding on foreign partners; and state-level returns in relevant states. We manage the entire annual stack.
Carried interest is the GP's profits interest — typically 20% of the fund's gains. Under US tax law, carry is generally taxed at long-term capital gain rates (preferable to ordinary income). However, Section 1061 (enacted in 2017) requires that carry attributable to assets held less than three years be reclassified as short-term capital gain. We track this requirement and report it correctly on the GP's K-1.
Under IRC Section 1446, partnerships must withhold US tax on the share of effectively connected income (ECI) allocable to foreign LPs. We calculate the withholding for each foreign partner, manage quarterly deposits using Form 8813, and issue Forms 8804 and 8805 annually. For FDAP income (dividends, interest), we prepare and file Form 1042/1042-S with treaty rate analysis for each foreign partner's country.
Foreign corporations held by the fund may be classified as Passive Foreign Investment Companies (PFICs) if they meet income or asset tests. US LP investors in funds holding PFICs need PFIC information (provided via the K-3) to make Qualified Electing Fund (QEF) elections or mark-to-market elections, which affect how the investment is taxed annually vs. at exit. We identify PFIC issues and report the required information on K-3.
Yes. We provide K-1 interpretation and advisory support to fund LPs, including foreign investors who need to understand how their K-1 affects their US filing obligations and their home-country tax return. We also assist with QEF elections, treaty analysis, and FBAR/FATCA reporting for LPs with US financial interests.
Fund tax consultation
Discuss your fund's compliance requirements with a senior advisor. We'll give you a clear scope and timeline.
Schedule a Call