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Business Journals
01-06-2025
- Business
- Business Journals
A primer for emerging real estate and private equity funds
With the surge in capital formation and the growing interest of investors in alternative assets, an increasing number of entrepreneurs, developers, and operators are launching investment funds. Whether you're raising capital for a value-add real estate project, a portfolio of operating businesses, or a targeted private equity strategy, achieving success in forming and managing an investment fund requires strategic planning and execution. Learn recommended practices for emerging real estate and private equity funds. Embracing these key practices can significantly enhance your chances of success and boost returns for you and your investors. Structuring the fund Fund sponsors should select the appropriate legal and tax structure for their fund. Most real estate and private equity funds are structured as limited partnerships or limited liability companies treated as partnerships for federal income tax purposes. This pass-through treatment allows gains and losses to flow to investors while avoiding entity-level taxation. However, fund structuring is not a 'one-size-fits-all.' Considerations include: Investor pool (domestic vs. foreign, tax-exempt vs. taxable) Carried interest allocations Preferred return waterfalls State of domicile/registration and related state tax implications Blocker entities for unrelated business taxable income (UBTI) or Foreign Investment in Real Property Tax Act (FIRPTA) concerns Recent discussions on the treatment of carried interest also highlight the importance of thoughtful structuring from the outset. Carried interest: What's changed and what may lie ahead Carried interest is the share of partnership profits a general partner receives from the investing partners for managing the investment and taking on the entrepreneurial risk. It can be taxed as either ordinary income or capital gain, depending on the nature of the income generated by the partnership. Typically, carried interest is a form of equity compensation granted to investment fund managers (i.e., real estate, private equity, venture capital, or hedge funds) in exchange for their investment services. Fund managers benefit from long-term capital gains tax treatment (20%) on their carried interest when underlying fund investments are sold, as opposed to ordinary income tax treatment (up to 37%) typically imposed on wage or service income. Over the past 20 years, lawmakers have introduced various proposals to increase the tax burden on carried interest. For example, the Tax Cuts and Jobs Act of 2017 increased the holding period requirement to three years to generate long-term capital gains treatment on carried interest. Most recently, there was a proposal to treat carried interest as an interest-free loan from the limited partners to the general partner, which would be taxable upon grant. Imputed interest on the loan would have been treated as deemed compensation to the general partners, regardless of profit generation. This proposal did not go into effect. Although sweeping changes have not yet passed, this remains a hot-button issue and an area of legislative focus. Fund sponsors are advised to meticulously document the services provided by general partners and structure partnership agreements in accordance with evolving tax guidance. Sponsors should collaborate with tax advisors to rigorously test current waterfall models and assess potential tax liabilities under various scenarios. Regulatory environment: SEC oversight and the evolving definition of accredited investor In 2020, the U.S. Securities and Exchange Commission (SEC) expanded the definition of an accredited investor to include individuals with certain professional certifications, such as Series 7, 65, or 82 licenses, and entities meeting specific criteria. This expansion increased the pool of potential investors. However, further reforms may tighten or reshape this definition. As of 2024, the SEC has signaled renewed interest in enhancing investor protections in the private markets. Potential changes could include: Reassessment of financial thresholds for accredited investors, which are currently set at $200,000 annual income or $1 million net worth Implementing enhanced disclosures for private offerings Enforcing more robust regulations around Form D filings and general solicitation rules For fund sponsors raising capital under Regulation D exemptions — particularly Rule 506(b) or 506(c) — it's crucial to comply with accreditation standards. This includes maintaining up-to-date and defensible verification processes, investor questionnaires, and recordkeeping. Fund administration: Getting it right from day one Strong fund administration is essential for maintaining compliance, scaling operations efficiently, and building investor trust. Outsourcing also allows fund managers to focus on sourcing deals and fostering investor relationships, rather than reconciling ledgers or calculating tax basis. While investment strategy often drives returns, disciplined back-office execution can provide the foundation for long-term success. Emerging funds often underestimate the operational complexity of ongoing fund administration. Accurate capital accounting, investor reporting, K-1 issuance, and waterfall calculations are mission-critical and increasingly scrutinized by investors and regulators alike. Key focus areas for strong fund administration include: Establishing a strong operational framework with documented accounting policies and internal controls Implementing effective onboarding processes for investors Leveraging technology for efficiency and access Prioritizing timely, transparent, and accurate reporting Providing consistent support and proactive communication Cultivating and maintaining a culture of responsiveness and accountability Staying compliant and ahead of regulatory changes Adopting investor relations and governance best practices Effective fund administration helps deliver a consistent, transparent, and scalable investor experience. By adopting these recommended practices, private investment funds can build trust, provide compliance, and achieve long-term success in the competitive real estate and private equity markets. Outsourced accounting: Enhancing efficiency and transparency For many emerging managers, outsourced accounting and finance solutions offer scalability and cost efficiency. These services typically include bookkeeping and general ledger maintenance, financial reporting and budgeting, cash flow management and treasury services, as well as assistance with audit and tax documentation. Investors increasingly expect financial transparency and timely reporting. An outsourced accounting function tailored to fund structures can deliver investor-ready statements, real-time dashboards, and improved decision-making. This approach is also important for preparing for eventual institutional capital or future fund raises. Tax compliance and state nexus considerations Funds investing across multiple states — particularly in real estate — must also contend with a patchwork of state and local tax rules. Filing requirements for composite returns, withholding obligations for nonresident investors, and sales/use tax exposure are all concerns. Additionally, pass-through entity (PTE) tax elections — now available in over 30 states — can mitigate the $10,000 federal state and local tax deduction cap for individual investors. Fund managers should evaluate whether PTE elections are beneficial for their investor base and structure their tax compliance accordingly. Proactive tax planning, including quarterly estimate management and basis tracking, is essential for maintaining investor confidence and avoiding unpleasant surprises. Safeguarding your funds and your business Real estate and private equity funds must prioritize cybersecurity to protect sensitive data, provide business continuity, and maintain the trust of stakeholders. These industries are particularly vulnerable to cyber threats due to collecting and storing sensitive information, such as social security numbers and banking details of tenants and investors. A data breach can lead to identity theft, fraud, and legal liabilities, while insecure online transactions can result in payment fraud and phishing attacks. Complying with various regulations and state privacy laws is essential to avoid fines and reputational damage. By implementing strong security measures and educating employees about potential threats, real estate and private equity funds can mitigate risks and protect their digital assets against cyber crime. How CLA can help with real estate and private equity funds Private investment offers significant opportunities for emerging real estate and private equity fund managers. Whether you are forming your first fund or scaling an existing platform, getting the structure, strategy, and service providers right is critical to long-term success. At CLA, we understand the complexities and challenges associated with real estate and private equity funds. Our team of experienced professionals provides comprehensive support tailored to your needs, helping you to navigate with confidence. For more information on real estate and private equity, contact Carey Heyman at or 310-288-4220. The information contained herein is general in nature and is not intended, and should not be construed, as legal, accounting, investment, or tax advice or opinion provided by CliftonLarsonAllen LLP (CLA) to the reader. For more information, visit
Associated Press
04-03-2025
- Business
- Associated Press
Signature CPAs & Advisors Expands Leadership in Miami's Boutique Accounting Industry
United States, March 4, 2025 -- Signature CPAs & Advisors, a premier boutique accounting firm based in Miami, continues to redefine financial advisory services with a specialized focus on tax strategy, compliance, and corporate financial planning. As businesses, real estate investors, and international clients seek expert guidance in an evolving financial landscape, Signature CPAs & Advisors stands out as a trusted partner dedicated to delivering precision-driven solutions. Co-founded by Bets Touitou and Oren Dayan, the firm was established with a clear mission: to provide highly tailored accounting and tax advisory services that extend beyond traditional compliance. Unlike large firms that often take a one-size-fits-all approach, Signature CPAs & Advisors offers a hands-on, consultative experience, ensuring that every client receives personalized financial strategies designed for long-term success. Expertise in International Taxation and Corporate Advisory With Miami serving as a global business hub, international tax compliance has become a critical concern for foreign investors and multinational businesses. Signature CPAs & Advisors specializes in navigating complex cross-border taxation, offering expertise in Foreign Bank Account Reporting (FBAR), FATCA compliance, Streamlined Offshore Disclosure programs, and tax structuring for foreign-owned U.S. entities. The firm also assists clients in understanding FIRPTA regulations, passive activity loss rules, and tax-efficient investment strategies, ensuring that they remain compliant while optimizing their financial outcomes. Beyond international taxation, the firm provides corporate advisory services tailored to startups, professional service firms, and established corporations. From business entity formation—including C-corporations, S-corporations, and LLCs—to strategic tax planning, corporate restructuring, and financial forecasting, Signature CPAs & Advisors empowers businesses with the insights they need to scale effectively. Commitment to the Business and Real Estate Community Miami's dynamic business environment continues to attract entrepreneurs, investors, and global enterprises. As financial regulations grow increasingly complex, businesses require more than just standard accounting services—they need a strategic partner who understands both the local economic landscape and global financial intricacies. Signature CPAs & Advisors has built a reputation as a premier resource for real estate investors, family offices, and business owners seeking expert tax guidance with a boutique-firm level of service. 'Our firm is committed to delivering high-level financial strategies that help our clients grow and protect their assets,' said Bets Touitou, Co-Founder of Signature CPAs & Advisors. 'We don't just provide accounting services—we offer strategic insights that empower businesses and investors to make informed financial decisions.' As Signature CPAs & Advisors continues to expand its influence in the boutique accounting space, the firm remains dedicated to offering innovative tax and advisory solutions while maintaining a personalized approach to client service. For more information, visit or contact [email protected] / 786-850-5997. Contact Info: Name: Bets Touitou
