'The Taxation of the Carried Interest of Sponsors of Private Equity Funds' Private equity fund sponsors' aim is to take their share of the profits in form of capital gains taxed at preferential rates. The conditions for preferential taxation according to U.S. and German tax law are basically similar but distinctly different in important aspects. The various reform alternatives advocated in the U.S. cannot be adopted into the German tax system. Because of changes of the German capital gains tax regime the current tax regime for carried interest should be repealed.

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