Hedge Fund CPA

With changing market conditions and increasing regulatory concerns, I&U CPA offers tax and accounting services combined with personal attention to help financial services companies meet and exceed their business objectives and to ensure that they are compliant with the unique, complex and often changing terms of fund reporting, tax, and accounting. Our Hedge Fund CPA team specializes in tax issues that affect Hedge Funds, Private Equity Firms, Venture Capital Funds, Securities Traders, with U.S. and foreign reporting requirements. I&U CPA’s hedge fund tax and accounting services help our hedge fund clients plan strategically to minimize their investors’ tax burdens, comply with regulatory filing requirements and meet their financial goals.

We focus on proactive planning to address concerns on the horizon before they become an issue, enabling our clients to better concentrate on investment performance. Our Hedge Fund CPA services provide the appropriate tax and accounting advice to meet investment community’s needs whether that means ensuring full compliance in tax reporting, minimizing tax exposure, fund administration or evaluating acquisition targets to assess the viability of an acquisition.

Our clients include funds that are in a master-feeder structure, fund of funds and stand alone funds, which invest in a wide array of financial instruments, including long short equities, international equities, options, debt securities including mortgage backed securities, foreign currencies, futures contracts, distressed securities and real estate investments.

While Hedge Fund ownership can provide significant investment opportunities, the complexity created due to cash flow, valuation, distribution, diversification and transfers can result in significant tax planning needs.

If your Hedge Fund is between $5MM – $25MM AUM, keep reading because you can benefit from our services and low cost fees. I&U CPA may give investors added assurance and confidence that may help in the marketing process. We provide following services for $3,000/month (our monthly minimum fee) assuming our services commence at the beginning of fund’s fiscal year.

Hedge Fund CPA Accounting and Administration:

  • Record trade and non-investment transactions
  • Maintain fund’s primary books and records
  • Record receipt or payment of dividends and interest
  • Process corporate actions
  • Record interest received/paid on cash credit/debit balances
  • Record all trading and bank account activity
  • Record fees and rebates
  • Review and follow-up on trade exceptions with the client, broker, and counter-party
  • Reconcile cash, positions, and market values with the custodian(s), prime brokers, and clients
  • Calculate management and performance allocation/fee in accordance with fund documents
  • Process investor transactions
  • Allocate profit and loss to individual investors and share classes
  • Prepare monthly financial statements
    1. Balance sheet
    2. Statement of operations
    3. Investor reports
  • Prepare investor statements and distribute to investors via secure client web portal and/or mail
  • Prepare draft financial statements
  • Liaise with auditors to facilitate the annual audit

Hedge Fund CPA Tax Management:

  • Maintain capital accounts for all partners, on both an economic and tax basis
  • Prepare partner tax allocations
  • Track built-in gain (loss) on contributed securities and mandatory Sec. 754 basis adjustment calculations
  • Prepare and file federal and state income tax returns for the fund, including K-1 reporting
  • Analysis of investments for compliance with wash sale and straddle rules
  • Analysis of income for proper classification under mark-to-market, 1256, 988 and other special rules
  • Section 475 election if appropriate
  • U.S. tax reporting and compliance for foreign investors including tax withholding based on U.S. tax treaties
  • U.S. tax reporting and compliance of foreign investments such as PFICs, including consideration of the Excess Distribution regime, Mark-to-Market regime, and the Qualified Electing Fund (QEF) regime
  • Calculation of withholding of state income taxes
  • Calculation of unrelated business taxable income

When you are looking for an accountant for your Hedge Fund, Venture Capital firm, or Private Equity group, or an accounting firm for your Family Office, Small Business Investment Company, or Fund of Funds, our experienced Hedge Fund CPAs and professionals at I&U CPA can help. Contact us today for a free consultation. Let us show you how we can add value to your business.


    $750 office visit fee applies for in-person meetings.