What You Can Do Today, Private Equity Edition: April 15

Resources and LP's response to COVID-19.

It’s a crucial time for private equity sponsors and investors to respond to the effect the pandemic is having on their portfolio companies. Here are some ways you can conserve cash and manage business operations in the short-term while preparing for long-term impact.

1. Decide if you should file an amended tax return. Normally, your portfolio company can’t file an amended return if it is taxed as a partnership. But now, the IRS is letting companies do this for 2018 and 19 to take advantage of the changes in the CARES Act. See what advantages this could bring you.  

2. Explore incentives that can help you continue to pay your employees. As you focus on saving cash, take a look at how the CARES Act can provide your portfolio company relief. There are tax advantaged loans to help pay payroll costs, and employment tax credits and deferral of employment tax payments. Make sure you follow the affiliation rules for eligibility for these loans.

3. See if you’re eligible for tax benefits as an individual investor. Don’t overlook the provisions in the CARES Act that could benefit you as an individual investor. This could be from deducting charitable cash contributions to taking coronavirus-related distributions from qualified retirement plans without incurring withdrawal penalties.

For more resources and LP's response to COVID-19, visit this webpage.