ECONOMY/TAXES: “Hedge-fund managers for years accumulated offshore gains without paying federal and state taxes. Now Uncle Sam is going to get paid.
Steven Cohen is one of many managers preparing to write huge checks in early 2018 due to a crisis-era decision to close a tax loophole that long benefited some of Wall Street’s wealthiest investors.
The billionaire founder of SAC Capital Advisors LP amassed deferred offshore income of more than $1 billion likely subject to the taxation, said people familiar with the matter. Other hedge-fund managers facing personal tax bills of over $100 million include David Einhorn of Greenlight Capital Inc. and Daniel Loeb of Third Point LLC, said people familiar.
Total payments from all managers could amount to $25 billion, according to a 2008 estimate from the Joint Committee on Taxation. Some tax specialists say the bill could be even higher: $100 billion or more.
This will likely mean a surge of tax revenue for Connecticut, historically the center of the hedge-fund industry. The state isn’t yet sure how much it will reap, said a spokesman for the governor’s budget office.”
-Gregory Zuckerman and Rob Copeland, “Loophole Closed: Hedge-Fund Managers Prepare Huge Tax Checks,” The Wall Street Journal online, July 20, 2017 05:30am