Tags: george soros | tax | hedge funds | bloomberg

Uncle Sam Calling George: Soros Said to Face Nearly $7 Billion Tax Bill

By    |   Saturday, 02 May 2015 10:06 AM

Legendary investor George Soros reportedly faces a huge tax bill of nearly $7 billion after years of deferring and reinvesting client performance fees in his hedge fund.

The loophole that allowed such a move comes to an end in 2017, leaving Soros with a potential $6.7 billion tax bill, Bloomberg Business reports.

Soros used the loophole to defer taxes on client fees. Instead, he reinvested them in his own fund, and they grew tax-free.

The loophole allowed the billionaire to “defer taxes on fees paid by clients and reinvest them in his fund, where they continued to grow tax-free,” according to Bloomberg.

Soros Fund Management had reportedly accumulated about $13 billion using this method as of 2013, through the use of deferrals, according to Irish regulatory filings by Soros, Bloomberg reported.

Legislation approved in 2008 gave hedge fund managers until 2017 to pay the “accumulated taxes” avoided by using such tax deferrals.

According to Bloomberg, Soros moved assets shortly before the change to Ireland, seen as a possible shelter from the law.

A handful of tax attorneys told Bloomberg they don't know of a way for money managers to avoid the bill in 2017.

“A great many people will bite the bullet and pay the tax,” says Fred Feingold, a senior partner at Feingold & Alpert. “It depends on how aggressive people are and how much they abhor paying taxes.”

Ironically, Bloomberg noted, "Soros has long called for a fairer distribution of income, once joining fellow billionaire Warren Buffett in urging Congress to raise estate taxes. In a 2011 essay, he wrote that he’d donated more than $8 billion to his foundations."

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Legendary investor George Soros reportedly faces a huge tax bill of nearly $7 billion after years of deferring and reinvesting client performance fees in his hedge fund.
george soros, tax, hedge funds, bloomberg
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2015-06-02
Saturday, 02 May 2015 10:06 AM
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