Blackstone's big tax break on its IPO

More fodder for those who would hike taxes on private equity firms: The New York Times reports on an analysis in a newsletter covering taxes, Tax Notes, that the Blackstone Group has pulled off quite a coup when it comes to taxes on the proceeds from the IPO. The IPO raised $4.75 billion. But the firm, by dint of creative use of good will, will get deductions on about $3.7 billion. The partners are entitled to roughly 85 percent of this. These deductions are spread over 15 years. The Times says over all the Blackstone partners will get back $198 million more than they paid in taxes. Apparently, such plots are not that unusual. But in the current climate, tax-hike proponents will take note. I still maintain that it will be hard to pass a bill that really pushes tax on partnerships higher. The industry has mobilized, and their resources are significant. But stay tuned.

For more:
- here's the article from The New York Times